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The Federal Communications Commission is proposing to bring a $2.8 million penalty against HobbyKing for marketing drone-attachable audio/video (AV) transmitters that operate on unauthorized frequencies.

For marketers and retailers of unmanned aircraft systems (“UAS”) and attachable devices, this penalty signals that the FCC is cracking down on the makers and marketers of noncompliant UAS and UAS-attachable devices. This penalty also serves as a reminder to operators, who are required to have an FCC license to operate a drone, even if it only operates on amateur frequencies.

According the FCC’s Notice of Apparent Liability, HobbyKing purported to offer UAS-attachable AV devices that operate on amateur radio frequencies (which do not require FCC certification).  On closer inspection, though, those devices also operated on additional frequencies, including some that require certification.  Moreover, as the notice states, some of the devices also apparently operated at power levels in excess of what is permitted for amateur equipment.

HobbyKing argued that it did not market its devices to customers based in the U.S.  The FCC was not persuaded, however, finding that HobbyKing had a record of sales in the U.S. and did not place limitations on shipping to the U.S.  The Commission was also not persuaded by Hobby King’s argument that the burden was on the customers to comply with local laws, stating that the burden of device compliance falls on the makers and marketers of the devices.

The Commission also took issue with:

  • Repeated violations after the FCC informed HobbyKing of the compliance issues;
  • Intentional marketing of the devices; and
  • Untimely and incomplete responses to the FCC’s letter of inquiry.

The FCC found particularly problematic that twelve of the devices operated on restricted frequencies used by the FAA, creating a risk to public safety and that another three devices operated at impermissibly high power levels.

The base forfeiture for violating these FCC rules is $7,000 for each violation or each day of continuing violation. The Commission adjusted this base upward to $12,500 for each of the 50 of the AV transmitters, due to the repeated violations, intentional marketing of unauthorized devices, and untimely/incomplete responses. For the remaining 15 transmitters that operated on restricted frequencies or at impermissible power levels, the FCC raised the penalty to the statutory maximum of $147,290. Adding another $39,278 for HobbyKing’s failure to fully respond to the Letter of Inquiry or to respond at all to the Letter of Inquiry Citation, the Commission proposed total forfeiture of $2,861,128.

Typically when a Notice of Apparent Liability is filed, the recipient has the option of paying the fine, petitioning for reconsideration of the facts or legal bases of the notice, or entering into a consent decree with the Commission.

To assist consumers, marketers, and manufacturers of drone AV transmitter accessories, the FCC’s Enforcement Bureau also issued an enforcement advisory.  For marketers and operators of AV transmitters, here are a few important takeaways:

  1. Only manufacture or market devices that operate on amateur frequencies, unless you receive FCC certification for operating on other bands;
  2. Keep transmitter power within the levels of the Commission’s rules;
  3. If the FCC contacts you regarding devices you’re marketing, seek legal counsel;
  4. If you receive a Letter of Inquiry, respond in a timely, complete, and accurate manner; and
  5. Both commercial and amateur drone operators have a responsibility to ensure that the equipment they are using complies with applicable FCC regulations because they could also be subject to FCC civil penalties for operating drones with noncomplying radio frequency devices.

For clients who operate at the intersection of communications, transportation, and data collection and use, Hogan Lovells provides a deep bench of experienced global regulatory practitioners. For more information on the laws and regulations concerning UAS and UAS-attachable devices or other connected device and communications issues, please contact Lisa Ellman at Lisa.Ellman@hoganlovells.com, Mark Brennan at Mark.Brennan@hoganlovells.com, or Trey Hanbury at Trey.Hanbury@hoganlovells.com.

The authors wish to thank Ryan Thompson in our Washington D.C. office for his assistance in preparing this article. 

 

Last year, for the first time, the FAA broadly authorized commercial drones here in the United States. Since that time, the commercial drone industry has grown to a level few could have imagined only a couple of years ago. Technology has moved quickly forward, and what used to be considered toys are now powerful commercial tools that are bringing economic and safety benefits to a wide range of industries.

As drone technology has improved, we have also seen increasing numbers of headlines raising legitimate drone security issues. We discussed many of these drone security issues at the Domestic Drone Securities Event in Washington, DC in November, 2017. There have been near-misses between drones and manned aircraft, and rogue drones flying where they should not lawfully fly—including at airports, military bases, critical infrastructure, and large outdoor sporting events.

Recognizing the potential safety and security benefits of a requirement that would allow public officials to remotely identify and track UAS, the FAA established the UAS ID and Tracking Aviation Rulemaking Committee (the ARC) in May 2017 to provide recommendations to the agency. Yesterday, the FAA publicly released the ARC’s final recommendations report (“Report”).

The most controversial section of the Report recommended that the FAA carve out model aircraft explicitly, or by design, from remote ID and tracking requirements. Notably, less than half of the ARC’s voting members affirmatively supported this threshold applicability recommendation. The Commercial Drone Alliance, along with several other ARC members, dissented on this critical point. The text of the Alliance press release is included below:

 

THE COMMERCIAL DRONE ALLIANCE DISSENTS FROM THE KEY RECOMMENDATIONS OF THE

UAS ID AND TRACKING AVIATION RULEMAKING COMMITTEE

To promote safety, security and innovation, group strongly disagrees with ARC’s recommendation to carve out model aircraft from Remote ID requirements

Washington D.C. and Silicon Valley, California, December 19, 2017 – The FAA established the UAS ID and Tracking ARC in May 2017 in response to concerns of the national security community around expanding drone operations nationwide. Only about half of the ARC’s voting members affirmatively supported the ARC’s recommendation on threshold applicability (Section 6.1 of the report). Several organizations and ARC voting members from the manned aviation, law enforcement and commercial drone communities concurred with the Alliance’s dissent. The Alliance appreciates the opportunity to have actively participated in the UAS ID and Tracking ARC, but fundamentally disagrees with the ARC report’s recommendation that model aircraft be carved out from Remote ID requirements.

The nascent drone industry is a revolution in the making. Technology has moved quickly forward, and what used to be considered toys are now tools of public safety agencies and industry. But while technology has moved quickly forward, policymaking has lagged behind, including on security issues.  Expanded UAS operations – including flights at night, beyond visual line of sight, and over people – essentially remain grounded until the law enforcement and national security communities are comfortable with their ability to identify and track unmanned aircraft. A robust “drone license plate” requirement is a critical prerequisite for unleashing the enormous potential of the commercial UAS marketplace. Such a requirement, properly tailored, would meet the security and public safety needs of the law enforcement and national security communities, while promoting innovation and propelling the growing drone economy forward.

The Alliance was therefore strongly disappointed with the ARC’s chosen approach, which excludes model aircraft from remote ID requirements. In identifying a threshold for applicability, the ARC recommended two options to the FAA. The first (“Option 1”) explicitly carves out model aircraft, while the second (“Option 2,” a “capabilities-based approach”) was similarly designed to carve out model aircraft.

The Alliance disagrees with any approach that would permit a huge segment of the drone community to avoid participating in the UAS ID and tracking system and complying with the corresponding ID and Tracking regulations. The number of vehicles registered for commercial use is a small fraction of the number of vehicles registered for hobbyist use. The percentages may change slowly over the next several years as commercial activity grows, but recreational drone activity is growing as well.

For decades, model aircraft use has captivated the imagination of the American public in a safe and secure way. But as technology has improved and times have changed, hobbyists are no longer flying alone. Unmanned Traffic Management (“UTM”) systems, being developed now as “highways in the sky,” will be less effective for everyone if anonymous non-participants clog the sky. For the new drone economy to truly take off, we all need to abide by some low-cost and unburdensome “rules of the road.”

The Alliance believes any remote ID solution must be simple, sustainable and scalable. The Alliance therefore supported a common-sense, weight-based threshold for Remote ID and Tracking applicability. As a rule, any UAS or model aircraft weighing 250 grams or more would have to comply with the ID and Tracking regulations. Including UAS weighing 250 grams or more is comprehensive, encompassing the majority of UAS except for very small and unsophisticated UAS, which would support robust UTM systems. The weight threshold is also familiar, building upon the existing UAS registration database, and future-proofs the ID and Tracking rules by accommodating technological development and enabling the continued growth of this new and exciting drone industry.

Notably, Congress must eliminate or amend Section 336 of the FAA Modernization and Reform Act in order to enable the FAA to properly regulate drone security issues. Section 336 currently carves out model aircraft from the law, but the provision is antiquated and harmful.

“Remote identification is a critical issue for the industry, and the key next step to unlocking the amazing promise of commercial drones. We look forward to working with the FAA and policymakers on this critical issue during the next stage of rulemaking, and will continue to provide input and formal comments at the appropriate time,” said Lisa Ellman, who represented the Alliance and its members on the Remote ID ARC.

For a more detailed explanation of the Commercial Drone Alliance view on remote identification and the ARC report, please see this op-ed in The Hill.

About the Commercial Drone Alliance

Founded in 2016, the Commercial Drone Alliance is an independent 501c6 non-profit led by the commercial drone industry co-located in Silicon Valley, CA and Washington, DC. The overarching vision of the Alliance is to support commercial enterprise end users and assist them with adopting drone technology into their businesses, reducing barriers to entry, addressing public education, and merging policy with innovation to develop relevant rules for operation. www.commercialdronealliance.org

Drones are the future of transportation and information technology. Recent innovations have transformed what used to be considered toys into powerful tools that provide substantial safety and efficiency benefits to commercial industry, educational institutions, humanitarian NGOs, and the public.  Once properly enabled, the integration of drones into our nation’s National Airspace System will save countless lives and have a significant economic impact here in the United States.

However, many of the safety and efficiency benefits of drones require the ability to operate over people. To respond to disasters, or deliver packages, or gather the news, companies need to be able to fly in urban and suburban environments, where people are. The current regulatory framework does not allow for flights over people without a Part 107 Waiver from the FAA.  But according to one recent study of FAA Part 107 waivers granted and denied to-date, a waiver to operate over people is the most difficult waiver to receive from the FAA. This makes the new and precedent-setting FAA Part 107 Waiver issued to CNN for operations over people all the more important.

The FAA recently issued the first ever Part 107 Waiver authorizing drone operations over people for closed-set filming to CNN. This is a significant success for not just film and media companies, but for large swaths of the commercial drone industry.

To understand the significance of the new operations over people waiver issued to CNN, some background on Part 107, the rule broadly authorizing commercial operations with small UAS (drones), and the FAA’s history of approving closed-set filming drone operations under the “Section 333” process is necessary.

Background: History of Closed Set Filming under Section 333 Exemptions

Building off its historical practice of issuing waivers to authorize helicopter operations at low altitudes over people for closed-set motion picture and television filming, in September 2014 the FAA issued the first “Section 333” exemptions to six different Hollywood film companies to allow drone flights over people on a movie set. As part of its review process, the FAA correctly recognized that operations over people who are involved with and have consented to an operation should be treated differently than operations over members of the public, and that different policy frameworks should govern each. Notably, “participants” in the Section 333 closed-set filming context were defined as people associated with the filming production who acknowledged and accepted the risks associated with the drone operations.  This definition was broader than the flightcrew only.

By the time Part 107 became effective in August 2016, the FAA had issued over 500 of these closed-set filming exemptions. There were no known safety incidents.  These exemptions had a limited duration of two years.

Part 107 Waiver Process

Implemented in August 2016, Part 107 was an important step forward for the commercial UAS industry. However, Part 107 limited operations in critical ways.  Significantly, the rule prohibited flights directly over people other than the flightcrew. “Participants” was defined narrowly under Part 107, and unlike the Section 333 context, did not include people who acknowledged and accepted the risks associated with the drone operations.  Under this narrow definition of a “participant,” personnel engaged in activities related to what the drone is being used for are nonparticipants, just as if they were any other member of the general public. This prohibition has created significant obstacles for commercial drone operators that want to use drones near, around, and over people, as a waiver would therefore be necessary to fly a drone over participants other than the flightcrew.

Meanwhile, as Part 107 took effect, the FAA phased out Section 333 exemptions. So the question then became whether the Part 107 Waiver process would provide companies with a viable path forward for conducting operations over participants other than the flightcrew.

Until now, there did not appear to be a viable path forward. In reviewing waiver applications, the FAA for months utilized only very conservative thresholds for assessing the risks associated with drone operations over people.  Consistent with the framework proposed by the Micro-UAS Aviation Rulemaking Committee (Micro-UAS ARC) for flights over people, the FAA’s review process focused solely (or almost entirely) on kinetic energy at impact. In other words, the FAA asked only: How hard will a drone hit someone if it falls from the sky? While this kinetic injury-based approach to assessing risk has value in simplicity, it fails to account for the full scope of operational and technical mitigations adopted by many applicants to help ensure safety.  Moreover, a kinetic injury-based approach will only work if the thresholds adopted are reasonable.  As we previously blogged about here, even the FAA’s own commissioned report on UAS human collision hazards suggests that previously considered thresholds were too conservative and did not accurately reflect the risks to a person of being struck by a falling drone.

The Significance of the New Part 107 Waiver

The FAA took a critical step forward with its issuance of CNN’s new Part 107 Waiver. On the surface, the waiver is important for the commercial drone industry because it is the first waiver authorizing drone operations over people for closed-set filming.  But its real significance goes deeper: With this new waiver, the FAA has once again recognized (correctly) that different policy frameworks should govern operations over people who are involved with the work being performed and have consented to the risks of drone overflight, versus operations over general members of the public.  Unlike prior FAA Waivers issued for operations over people, the FAA did not look solely to the kinetic energy of a falling drone for its risk assessment.  The waiver authorizes CNN to operate any drone weighing less than 55 pounds over people with no altitude restrictions (beyond those that apply generally to all Part 107 operations).

Importantly as well, the category of people over whom CNN is authorized to fly drones under the new Part 107 Waiver is broader than what used to be permitted in the Section 333 closed-set filming context.  In the Section 333 context, the ability to fly over people only applied to operations conducted for the purpose of closed-set motion picture and television filming and production.  In this new precedent-setting waiver, the authority to fly over people is not tied to any specific type of operation.  Under the CNN waiver, authorized persons whom the drone can fly over include people “necessary to accomplish the work activity directly associated with the operation…”

This is a big deal because it sets a precedent for not just film and media companies, but for other industries that also need to operate over people. The authority that CNN has to fly over news broadcasters on a film set could apply just as equally to flights over workers on a construction site or plant personnel at a critical infrastructure facility.

We should all be thankful for this step forward for the commercial drone industry. The new CNN waiver marks a common sense step forward as the FAA seeks to allow safe and expanded drone operations over people.  We hope that broad authorization in the form of a reasonably-crafted “operations over people” rulemaking will come next.

For additional information, see our press release on CNN’s new Waiver here.

In the last few weeks, both houses of Congress have released draft FAA Reauthorization bills to continue FAA funding which runs out this fall. While the House bill’s proposal to privatize air traffic control in the United States has garnered the most attention, both the House and Senate bills contain lengthy and significant legislative language that could have a dramatic effect on commercial and hobbyist drone operations in the United States.  Below is a brief summary of the main UAS provisions in both the House and Senate version of the bill.  We are closely tracking this legislation and will keep readers apprised of updates as they occur.

Officially titled the 21st Century Aviation Innovation, Reform, and Reauthorization (AIRR) Act, the House FAA Reauthorization Bill includes the following UAS highlights:

  • UAS Traffic Management (UTM) System: Directs the FAA to initiate rulemaking within 18 months to establish procedures for issuing air navigation facility certificate to operators of low-altitude UTM systems. Similar to the “Section 333” process in the FAA Modernization and Reform Act of 2012, the bill directs the FAA to consider whether UTM systems posing the least amount of risk to the National Airspace System or the public could safely operate now, and if so, to establish requirements for their safe operation in the National Airspace System.
  • Risk-Based Permitting Process: Establishes a risk-based permitting process to authorize UAS operations that meet certain safety standards. This section of the bill is a holdover from the House’s proposed Bill last year and was obviously drafted prior to the enactment of the FAA’s Small UAS Rule (Part 107).
  • Small UAS Air Carrier Certificate: Establishes an air carrier certificate for operators of small UAS for package delivery.
  • Beyond Visual Line of Sight (BVLOS) Operations at FAA Test Sites: Extends the FAA test site program and directs the FAA to permit and encourage BVLOS flights of UAS equipped with sense-and-avoid technology at test sites.
  • UAS Privacy Review: Requires a DOT study on the privacy implications of UAS operations.
  • UAS Registration: Directs the DOT Inspector General to assess the FAA’s small UAS registration system and requires FAA to develop and track metrics to assess compliance with and effectiveness of the system.
  • Study the Role of State and Local Governments: Directs the DOT Inspector General to study the potential roles of state and local governments in the regulation and oversight of low-altitude small UAS operations.
  • Pay-to-Play: Requires the Comptroller General to study appropriate fee mechanisms to recover the costs of regulation and oversight of UAS and the provision of air navigation services to UAS.

The Senate also released its own version of the draft FAA Reauthorization Bill, which includes the following UAS provisions:

  • New Privacy Policy Requirement: Requires commercial UAS operators to have a publically available written privacy policy that describes how they collect, use, retain, disseminate and delete any data collected with the UAS.  Newsgatherers using UAS would be exempt from the requirement.
  • New Database of Commercial and Governmental UAS Operators: Requires the FAA to establish a public database of public and civil (commercial) UAS operators. The database would include the owner/operator’s name, email address, phone number and UAS registration number.
  • Safety Design Standards and New Requirements for UAS Manufacturers:  Directs FAA to charter an aviation rulemaking committee (ARC) to develop design and production standards (consensus safety standards) for small UAS sold in the United States.  In order to sell most small UAS in the U.S. market, manufacturers would be required to certify to the FAA that the small UAS meets the consensus safety standards.
  • Review of Privacy Issues Associated with UAS: Requires the Comptroller General of the United States to conduct and submit to the appropriate committees of Congress a review of the privacy issues and concerns associated with the operation of UAS.
  • UAS Test Sites: Continues test site funding through September 30, 2021.
  • UAS Safety Enforcement: Requires the FAA to establish a program to utilize available remote detection and identification technologies for safety oversight, including enforcement actions against operators of UAS that are not in compliance with applicable federal laws and regulations.
  • Airport Hazard Mitigation and Enforcement: Directs the FAA to work with DoD and DHS to develop, test and deploy counter-UAS systems to mitigate threats from rogue UAS interfering with safe airport operations.
  • Package Delivery: Requires the FAA to issue a final rule authorizing the carriage of property by small UAS for compensation or hire within 1 year.
  • Collegiate Training Initiative: Establishes a Collegiate Training Initiative program to make agreements with institutions of higher education for preparing students for careers involving UAS.
  • Improvements to the Part 107 Waiver Process: Directs the FAA to: (1) publish a representative sampling of safety justifications offered by Part 107 waiver/authorization applicants for each regulation waived or class of airspace authorized and; (2) update the online waiver/authorization portal to provide real time confirmation that an application has been filed and allow applicants to review the status of the application.
  • Study the Role of Federal, State and Local Governments in Regulating UAS: Directs the U.S. Comptroller General to conduct a study and submit a report to Congress on the relative roles of the Federal Government and State and local governments in regulating the national airspace system, including UAS operations.
  • New Criminal Offenses for Unsafe UAS Operations: Establishes criminal penalties for UAS operators that knowingly and willfully interfere with manned aircraft operations or fly within a runway exclusion zone of an airport.

 

 

 

In Europe, the United States and countries around the world, drone technology is advancing rapidly, and what used to be considered toys are quickly becoming powerful commercial tools that can provide enormous benefits in terms of safety and efficiency. However, before some of the most innovative drone applications can become reality, including things like package delivery and long-range infrastructure inspections, most countries, particularly those with more congested airspace, will need some form of a low-altitude traffic management system to ensure drones can avoid colliding with buildings, manned aircraft, or one another.  Developing such a safety system will be critical to unlocking the most promising drone applications of the future.

Last month the Single European Sky Air Traffic Management Research Joint Undertaking (“SESAR“), the organisation set up in 2007 to coordinate European research and development activities on air traffic management (“ATM“), unveiled its blueprint for automated air navigation technologies for low altitude drones operating in complex airspace.

The blueprint fleshes out the European Commission’s plans for a “U Space” – an area of urban airspace up to 150m that is actively managed by technology to allow for “safe, efficient and secure access to [urban] airspace for large numbers of drones.”

The proposal was first announced by Violeta Bulc, the European Commissioner for Transport, at a conference in Warsaw last year.

The Commission hopes that “U Space” will provide similar functions to those provided by the Unmanned Aircraft Systems (“UAS” or drone) Traffic Management (“UTM”) system being developed by the National Aeronautics and Space Administration (“NASA”), the Federal Aviation Administration (“FAA”) and global industry partners in the United States for enabling safe, efficient low-altitude drone operations.

What is U-Space, and what does SESAR’s blueprint mean for drone users?

SESAR expects that “U Space” will initially provide a system for the e-registration and e-identification of drones. It also hopes that “U Space” technology will allow certain restricted sites to be geo-fenced by air service navigation providers.

These proposals are not new. On 12 May 2017 the European Aviation Safety Agency (“EASA“) opened its formal consultation into regulatory changes requiring certain UAS to be registered and licensed. You can read our previous blog on that consultation (and the proposed regulatory changes) here.

In the future, SESAR intends for “U Space” to provide flight planning and approval services, drone tracking and “conflict detection” functions as well a means of interfacing UAS traffic management with conventional air traffic control systems.

SESAR hopes that “U Space” when fully operational will “encourage innovation, support the development of new businesses and facilitate the overall growth of the European drone services market.” It also expects that “U Space” technology will allow a number of drone operations that are currently restricted to be liberalised.

When will “U Space” be implemented?

SESAR has divided “U Space” into four implementation phases:

  • Phase 1: providing e-registration, identification and geo-fencing services;
  • Phase 2: providing flight planning and approval services, interfacing with conventional air traffic control, and providing flight tracking and “automated airspace information” services(i.e. warning when cranes are or other temporary obstacles are erected);
  • Phase 3: providing capacity management and conflict detection technologies (SESAR suggests that this will allow for a “significant increase” in UAS operations); and
  • Phase 4: fully integrating drone air traffic control with manned aviation.

The European Commission and SESAR have made clear that they expect “U Space” Phase 1 by the end of 2019; and SESAR has suggested that “pre-operational […] demonstrations” of Phase 2 will also be available by that time. Neither the European Commission nor SESAR have indicated when they expect Phases 3 and 4 to become fully operational.

Drone technology has advanced rapidly over the last decade, and this technology has become a valuable tool for many industries on a global scale.  The commercial and consumer uses for drones have grown exponentially, and the industry is poised to see aggressive growth.

With commercial and hobbyist drones filling our skies, policymakers have increasingly expressed security concerns. How can law enforcement mitigate potential threats? What security concerns do flights over people, beyond visual line of sight, and at night pose – and are there technology solutions that can mitigate security risks and help enable broader operations? How can industry contribute to the federal government policy conversation around domestic drone security? Continue Reading Commercial Drone Alliance Issues Statement on June 28th Domestic Drone Security Summit

Following serious incidents of civilian drones entering the airspace of Chinese airports and causing flight delays last April, China’s civil aviation authority has issued the Real-name Registration of Civil Unmanned Aircraft Administrative Provisions, with effect from May 16, 2017, in an effort to increase accountability for drone use by requiring owners and manufacturers of civilian-use unmanned aircraft systems to complete “real-name” registration procedures. Continue Reading Real-name registration requirement imposed for civilian-use drones in China