```

[Senate Hearing 114-635]
[From the U.S. Government Publishing Office]

                                                        S. Hrg. 114-635

                UP IN THE AIR: EXAMINING THE COMMERCIAL
                   APPLICATIONS OF UNMANNED AIRCRAFT
                          FOR SMALL BUSINESSES

=======================================================================

                                HEARING

                               BEFORE THE

                      COMMITTEE ON SMALL BUSINESS
                          AND ENTREPRENEURSHIP
                          UNITED STATES SENATE

                    ONE HUNDRED FOURTEENTH CONGRESS

                             SECOND SESSION

                               __________

                             MARCH 10, 2016

                               __________

    Printed for the Committee on Small Business and Entrepreneurship

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

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            COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP

                    ONE HUNDRED FOURTEENTH CONGRESS

                              ----------                              
                   DAVID VITTER, Louisiana, Chairman
             JEANNE SHAHEEN, New Hampshire, Ranking Member
JAMES E. RISCH, Idaho                MARIA CANTWELL, Washington
MARCO RUBIO, Florida                 BENJAMIN L. CARDIN, Maryland
RAND PAUL, Kentucky                  HEIDI HEITKAMP, North Dakota
TIM SCOTT, South Carolina            EDWARD J. MARKEY, Massachusetts
DEB FISCHER, Nebraska                CORY A. BOOKER, New Jersey
CORY GARDNER, Colorado               CHRISTOPHER A. COONS, Delaware
JONI ERNST, Iowa                     MAZIE K. HIRONO, Hawaii
KELLY AYOTTE, New Hampshire          GARY C. PETERS, Michigan
MICHAEL B. ENZI, Wyoming
                Meredith West, Republican Staff Director
               Robert Diznoff, Democratic Staff Director
               
               
               
               
               
               
               
               
               
               
               
               
               
               
               
                            C O N T E N T S

                              ----------                              

                           Opening Statements

                                                                   Page

Vitter, Hon. David, Chairman, and a U.S. Senator from Louisiana..     1
Booker, Hon. Cory A., a U.S. Senator from New Jersey.............     3
Shaheen, Hon. Jeanne, a U.S. Senator from New Hampshire..........    73

                               Witnesses
                                Panel 1

Wynne, Brian, President and CEO, Association for Unmanned Vehicle 
  Systems International, Arlington, VA...........................     5
Canoll, Tim, President, Air Line Pilots Association, 
  International, Washington, DC..................................    13
Dourado, Eli, Director, Technology Policy Program, Mercatus 
  Center, George Mason University, Arlington, VA.................    34

                                Panel 2

Vaneck, Thomas W., Vice President, Disruptive Technologies, 
  Physical Sciences Inc., Andover, MA............................    58
McNeal, Gregory S., JD/PhD, Professor of Law, Pepperdine 
  University, Co-Founder, AirMap.................................    64

          Alphabetical Listing and Appendix Material Submitted

Booker, Hon. Cory A.
    Opening statement............................................     3
Canoll, Tim
    Testimony....................................................    13
    Prepared statement...........................................    15
Dourado, Eli
    Testimony....................................................    34
    Prepared statement...........................................    36
    Responses to Questions Submitted by Senators Fischer, 
      Heitkamp, and Scott........................................    90
McNeal, Gregory S.
    Testimony....................................................    64
    Prepared statement...........................................    66
Motion Picture Association of America
    Statement Dated March 10, 2016...............................    84
Shaheen, Hon. Jeanne
    Testimony....................................................    73
    Prepared statement...........................................    74
Vaneck, Thomas W.
    Testimony....................................................    58
    Prepared statement...........................................    60
Vitter, Hon. David
    Opening statement............................................     1
Wynne, Brian
    Testimony....................................................     5
    Prepared statement...........................................     7
    Responses to Questions Submitted by Senators Fischer and 
      Heitkamp...................................................    85

 
                      UP IN THE AIR: EXAMINING THE
                  COMMERCIAL APPLICATIONS OF UNMANNED
                     AIRCRAFT FOR SMALL BUSINESSES

                              ----------                              

                        THURSDAY, MARCH 10, 2016

                      United States Senate,
                        Committee on Small Business
                                      and Entrepreneurship,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 10:04 a.m., in 
Room 428A, Russell Senate Office Building, Hon. David Vitter, 
Chairman of the Committee, presiding.
    Present: Senators Vitter, Risch, Gardner, Ernst, Ayotte, 
Shaheen, Cantwell, Heitkamp, Markey, and Booker.

 OPENING STATEMENT OF HON. DAVID VITTER, CHAIRMAN, AND A U.S. 
                     SENATOR FROM LOUISIANA

    Chairman Vitter. Good morning, everyone, and welcome.
    Thanks for joining us today for the Senate Small Business 
and Entrepreneurship Committee's hearing to examine the 
commercial applications of unmanned aircraft systems, or UAS, 
by small businesses. We are going to be hearing from one panel 
of industry experts and one panel of small businesses, and I 
want to thank all of our witnesses for being here today and 
really contributing a lot. We appreciate it.
    The purpose of this hearing is really twofold. First, to 
highlight the need to integrate UAS into the national airspace 
in a way that fundamentally ensures safety as the top priority. 
I have raised significant concerns about the safe operation of 
this technology and it is crucial that the Federal Aviation 
Administration, the FAA, develops regulations to promote a 
culture of safety and compliance for the growing number of UAS 
users.
    But the second purpose of the hearing is to also recognize 
that while the FAA has certainly taken an extended period of 
time to develop these regulations, it risks sacrificing not 
only safety, but the proper development of this technology for 
the benefit of the economy and for consumers. The FAA's failure 
to meet regulatory deadlines has limited the growth of the 
commercial drone industry. I am hopeful that today's 
conversation will bring us closer to finding that right balance 
between the safe integration of drones in the national airspace 
and moving forward with economic development, not stifling 
small business innovation and utilization.
    The potential of UAS's economic contribution certainly 
cannot be ignored, and it is not at all surprising that our 
nation's entrepreneurs have made quick work of learning to 
benefit from this technology. In recent years, UAS have 
developed into useful and major tools for many small 
businesses. They are used in all sorts of applications across 
many industries, including agriculture, real estate, 
construction, film and TV, telecommunications, to name just a 
few.
    The Association for Unmanned Vehicle Systems International 
recently issued a report and it concluded that precision 
agriculture is one of the most promising commercial markets for 
UAS. The report estimated that once FAA regulations are 
finalized, the UAS industry expects to produce over 100,000 
total U.S. jobs and $82 billion in economic impact within a 
decade.
    In the meantime, drones are prohibited for commercial 
purposes and the FAA has granted exemptions only on a case-by-
case basis, and that is one of the major issues and hurdles, 
slow-ups, we are going to talk about today. It seems to me 
case-by-case analysis is not the best way to proceed for 
safety's sake, and it is certainly not the most efficient way 
to engage a growing industry, and the FAA needs to update its 
exemption process to be sure we cover safety and so that small 
businesses are taken care of in a timely way. The current 
process is simply unacceptable and leaves too many small 
businesses out to dry.
    The silver lining lies within the simmering growth of the 
industry. In 2014 alone, the companies that were granted 
exemptions are estimated to have contributed nearly $500 
billion in revenue and represented over 600,000 jobs. And of 
the first 1,000 commercial UAS exemptions, small businesses 
made up about 95 percent of them.
    I know that our entrepreneurs and small business owners 
want to follow the rules and use UAS for low-risk activities. 
But under the current circumstances, they face unnecessary 
barriers that prevent growth. The last thing our economy needs 
is unnecessary obstructions to small business growth, which is 
responsible for a huge part of sustaining jobs for hard working 
Americans.
    And I also say the other reality of the current state of 
affairs is that, quite frankly, you have a lot of folks, 
including small businesses, that simply are not going to 
comply. It is not practical and not sustainable, and that 
brings up real safety issues if you have a culture of a pretty 
wide open common non-compliance.
    In light of these realities, I have authored the Micro 
Drone Safety and Innovation Act. This bill would establish a 
micro classification for UAS that weigh 4.4 pounds or less in 
order to prioritize safety while promoting open innovation. The 
bill calls for strict safety requirements that fall in line 
with proposed regulations from the FAA. It is my belief that we 
can help maintain our country's competitive advantage while 
encouraging a culture of safety and compliance for UAS users.
    Now, let us get to today's conversation. I am extremely 
interested to hear from our witnesses about their experience 
with FAA's current process and what they expect when proposed 
regulations are finalized. I also hope our expert panelists 
will inform us of the impact UAS integration will have on our 
economy, how it has made a difference in their work, ways we 
can emphasize safety in our country's air space. And, of 
course, I would welcome any comments about my legislation, 
which we are introducing this week.
    Again, I want to thank everyone for being here today and I 
look forward to the discussion.
    And now, I will turn to Senator Booker, who will offer an 
opening statement in Senator Shaheen's absence.
    Senator.

 OPENING STATEMENT OF HON. CORY A. BOOKER, A U.S. SENATOR FROM 
                           NEW JERSEY

    Senator Booker. Senator Vitter, I want to thank you very 
much. It is very good that you are holding this hearing. I want 
to thank the folks that are here today.
    I get really excited about the future and the possibility 
for us to innovate as a country. We have expanded our economy 
in every generation because of American innovation, leading the 
globe. We are the net global exporters of innovation, of ideas, 
of new technology, and we need to stay on that cutting edge.
    And, what frustrates me and worries me right now is when it 
comes to UAS and drone technology, it is now literally taking 
off across the globe but being stifled right here at home. We 
are the country that invented flight. We are the nation that 
led the world into the skies. But now for this incredible 
technology, we have a regulatory regime that is undermining 
innovation at home and spawning it in other places. If during 
the time of Wilbur and Orville Wright we had this kind of 
regulatory regime, we would not be flying planes today the way 
we are.
    And, so, this is something we need to create an environment 
where we can explore, where we can innovate, where we can lead 
again, and I am very frustrated that in this area that has such 
profound potential, some of which Senator Vitter touched on, 
which, really, to me, is just the tip of the iceberg in terms 
of the transformational opportunities it holds for our economy.
    And, this is not just our economy. It is not just dollars 
and cents. As a former mayor who saw the power of first 
responders, it can improve our search and rescue activities, 
and it can improve our ability to provide humanitarian aid, 
critical medicines. We should be making sure that we are doing 
this responsibly. We should make sure that we emphasize safety. 
But, we should do everything we can to let loose the reins of 
innovation and ideas.
    There is an unbelievably clear economic case. This should 
be bringing left and right together when it comes to issues of 
economic growth. The Senator gave a tremendous amount of data 
and statistics. Already, UAS accounted for $500 billion in 
revenue and represented over 600,000 jobs in the United States. 
And for me, it could bring efficiencies across industries, and, 
again, even more compelling to me is it can save lives.
    In order to reap the major social and economic benefits of 
this technology, we must have regulations that keep pace with 
innovation. That is one of the frustrating things in my two 
years as a Senator, is that the increasing pace of innovation 
and change, we are just not keeping up as a government, just 
not creating an atmosphere in which we can really maintain our 
competitive edge globally.
    I am very proud to be working in a bipartisan manner with 
Senator Hoeven, who comes from a State very similar to New 
Jersey, and I am working with him. We have introduced already 
the Commercial UAS Modernization Act, which aims to unleash 
commercial UAS and actually provide businesses with some of the 
stable footing to make investments prior to the FAA's long 
overdue rulemaking.
    I look forward to working on, with him and others, to 
advance this exciting technology as we move forward with the 
FAA reauthorization later this month. There is an urgency here, 
though. I really do feel an urgency, because every single day 
that we have a restrictive, overburdensome, unnecessary 
regulatory environment, we allow other nations to outpace us, 
we allow people to move past us, we allow lives that could be 
saved to be put in peril, and we undermine, again, our global 
dominance when it comes to innovation, when it comes to 
entrepreneurship, when it comes to expanding the horizons of 
the world.
    Thank you.
    Chairman Vitter. Thank you, Senator.
    As we always do, we will invite any other member of the 
committee to submit opening statements for the record, but we 
always like to get right to our witnesses and hear from them 
and be able to interact with them.
    I am going to introduce our first panel, and then, 
unfortunately, I am going to have to excuse myself because I 
need to be in the Judiciary Committee, and Senator Ayotte will 
take over the gavel. But, let me introduce our first panel of 
industry experts.
    First is Mr. Brian Wynne. Mr. Wynne is President and CEO of 
the largest association representing the unmanned systems and 
robotics industries. AUVSI is the world's largest nonprofit 
organization dedicated to the advancement of unmanned systems 
and represents more than 7,500 members from 60 allied countries 
and 2,700 organizations involved in the fields of government, 
industry, and academia.
    After that, we will hear from Captain Tim Canoll. Captain 
Canoll is the President of ALPA, which represents more than 
52,000 professional airline pilots who fly for 31 airlines in 
the U.S. and Canada. ALPA serves as the largest non-
governmental aviation safety organization in the world and has 
worked closely with both government and industry on the 
integration of unmanned aircraft to the national aviation 
system.
    And rounding out our first panel is Mr. Eli Dourado. Mr. 
Dourado specializes in internet governance, intellectual 
property, crypto-currency, internet security, and the economics 
of technology. His popular writing has appeared in the New York 
Times, the Washington Post, Foreign Policy, the Guardian, and 
Wired, among many other outlets.
    Welcome to all of you, and as I hand the gavel over to 
Senator Ayotte, I will invite Mr. Wynne to begin.

    STATEMENT OF BRIAN WYNNE, PRESIDENT AND CHIEF EXECUTIVE 
       OFFICER, ASSOCIATION FOR UNMANNED VEHICLE SYSTEMS 
                  INTERNATIONAL, ARLINGTON, VA

    Mr. Wynne. Thank you, Mr. Chairman, and thank you, Senator 
Booker, Senator Ayotte. It is a pleasure to be here on behalf 
of the Association for Unmanned Vehicle Systems International, 
the world's largest not-for-profit organization devoted 
exclusively to advancing the unmanned systems and robotics 
community.
    UAS increase human potential, allowing us to execute 
dangerous or difficult tasks safely and efficiently. From 
inspecting pipelines to filming movies, the applications of UAS 
are virtually limitless.
    The UAS industry is also poised to be one of the fastest 
growing in American history. Our economic impact study found 
that, during the first decade following UAS integration into 
the airspace, the industry will create more than 100,000 jobs 
and provide more than $82 billion in economic impact, and that 
is just in our community alone. That does not count the value-
added, some of the statistics that you were describing, Senator 
Booker, to the other communities that will be benefiting from 
the technology. Under the right regulatory environment, there 
is no question these numbers could go even higher.
    For years, AUVSI has been urging the FAA to use all 
available means to establish a regulatory framework, starting 
with finalizing the small UAS rule. As we wait, American 
businesses are left sitting on the sidelines or operating under 
an onerous exemption process.
    In May 2014, the FAA announced it would consider granting 
exemptions for certain low-risk commercial UAS applications 
under Section 333 of the 2012 FAA Modernization and Reform Act. 
Since then, the FAA has granted more than 3,700 exemptions, the 
vast majority of which are going to small businesses. For 
example, Louisiana-based LandBros Aerial is a start-up founded 
by two brothers in 2014 who use small quad copters to capture 
aerial images for the construction industry.
    While some businesses are flying, this current system of 
case-by-case approvals is not a long-term solution and in many 
cases serves as a deterrent. Policies governing the 333 
exemption process are more onerous than those contemplated in 
the proposed small rule. For instance, Section 333 exemptions 
typically require approved UAS operators to hold at least a 
sport pilot certificate, which requires a minimum of 20 hours 
of training in a manned aircraft and costs thousands of dollars 
to obtain. Under the proposed rule, however, commercial UAS 
operators will more appropriately be required to pass an 
aeronautical knowledge exam every two years in order to fly.
    Additionally, access to some airspace is more complicated 
under the exemption process. Currently, approvals automatically 
allow commercial operators to fly up to 200 feet. Under the 
proposed rule, commercial operators would be allowed to fly up 
to 500 feet.
    In addition to the bureaucratic nature of the exemption 
process, the patchwork of state and local laws under 
consideration in many jurisdictions will create additional 
hurdles for small business. Any operator flying in multiple 
states may encounter and need to comply with different laws and 
regulations governing commercial UAS operations. The U.S. Code 
clearly states, and I quote, ``The United States government has 
exclusive sovereignty of airspace of the United States,'' 
unquote.
    In December 2015, the FAA asserted its authority and 
cautioned states and municipalities against enacting 
conflicting UAS legislation. The FAA was right to do so, but 
until the agency finalizes the regulatory framework for small 
UAS, states and municipalities will continue to fill the void.
    In addition to helping the industry thrive, finalizing the 
small UAS rule will provide the necessary tools and training to 
create a culture of safety. As more commercial operators are 
certificated, they will join the longstanding aviation 
community, which I have been a part of for more than 25 years 
as an instrument-rated general aviation pilot.
    Safety is essential for all users. That is why AUVSI, in 
partnership with the Academy of Model Aeronautics and the FAA, 
developed a ``Know Before You Fly'' campaign to educate 
newcomers to UAS about where they should and should not fly. I 
am pleased to note that ALPA is also a supporter of that 
campaign.
    While it is vital that the FAA finalize the small UAS rule, 
Congress also needs to pass an FAA reauthorization. This is 
critical for accelerating and expanding the commercial use of 
UAS and the most immediate way to encourage additional 
collaborative innovation between industry and government.
    UAS technology is developing rapidly, much faster than our 
country's capacity to develop the necessary regulations. We 
need to make sure the FAA adopts the proper framework to keep 
up with this technology and is sufficiently resourced to do so.
    Thank you again for the opportunity to testify this 
morning. I look forward to your questions.
    [The prepared statement of Mr. Wynne follows:]
    
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    
    Senator Ayotte [presiding]. Thank you, Mr. Wynne.
    I would like to now call on Captain Tim Canoll, who is the 
President of the Air Line Pilots Association. Thank you, Mr. 
Canoll.

  STATEMENT OF CAPTAIN TIM CANOLL, PRESIDENT, AIR LINE PILOTS 
           ASSOCIATION, INTERNATIONAL, WASHINGTON, DC

    Mr. Canoll. Thank you, Senator Ayotte, Senator Booker, and 
to the committee for the opportunity to testify today.
    The Air Line Pilots Association, International, has long 
stood in strong support of safely integrating unmanned aircraft 
systems, or UAS, into the national airspace. We recognize that 
UAS can perform specialized tasks efficiently and safely. ALPA 
applauds the entrepreneurs who are identifying new uses for UAS 
to help advance small business and the national economy. We 
also commend the members of Congress who have expressed an 
interest in UAS.
    In this context, our support for innovation and growth, 
ALPA's greatest concern will always be safety. The U.S. 
airspace is the most dynamic on the planet. It is also the 
safest. We cannot rush UAS integration process. That must begin 
and end with making certain that the high level of aviation 
safety that exists today continues tomorrow.
    We know that unsafe situations involving UAS are occurring 
right now. Each month, the FAA receives more than 100 reports 
of UAS sightings from pilots and others. In Louisiana, for 
example, the air traffic control tower reported that an 
airliner on final approach to Baton Rouge Metropolitan Airport 
observed a UAS at 500 feet just one mile from the runway. In 
Manchester, New Hampshire, the air traffic control tower 
received a report from an airliner of a UAS hovering at 2,800 
feet about 7.5 miles northeast of the airport on the arrival 
path.
    While it is almost certain that these events involved 
recreational rather than commercial UAS operators, they 
demonstrate the need for UAS pilot education and enhanced 
safety.
    For airline pilots like me, UAS often literally appear out 
of the blue. They are much smaller than other aircraft and they 
move more slowly than airliners. As a result of this 
difference, UAS are extremely difficult to see in flight. While 
the FAA is making progress, it needs to address all UAS uses 
with a full regulatory safety framework.
    ALPA's near-term action plan contains four parts. 
Education. Anyone flying UAS, no matter the size, should 
understand the aircraft and the airspace and the other aircraft 
that share it. ALPA maintains that commercially operated UAS 
should be flown by pilots who have the necessary knowledge. All 
U.S. transportation forms, be they marine, rail, road, or air, 
require commercial licenses for commercial operations. UAS 
should be no different. Where our resources exist, such as the 
``Know Before You Fly'' campaign, not every UAS owner makes the 
effort to learn about the safety regulations. We urge the FAA 
to do more to reach out to small businesses and other users 
regarding UAS safety.
    Registration. ALPA is pleased that more than 342,000 UAS 
owners have already registered with the FAA. While we applaud 
the civil and criminal penalties for those who do not register, 
ALPA maintains that point-of-sale registration is essential.
    Technology. If UAS operate in airspace intended for 
airliners, or if they could end up there, airline pilots need 
to be able to see them on their cockpit displays and 
controllers need to see them on their radar scopes. The UAS 
must also be equipped with active technologies to avoid a 
collision with manned aircraft. The FAA should identify 
resources to develop UAS-centric collision avoidance 
technologies in fiscal year 2016 and adopt them in fiscal year 
2017.
    In addition, if regulations restrict UAS from operating in 
a location, the UAS must have technology that cannot be 
overridden to prevent it from flying there. The FAA must also 
continue to evaluate technologies to identify UAS and operator 
location.
    Penalties and enforcement. ALPA calls for the full 
enforcement of civil and criminal penalties regarding UAS. If 
the FAA intends to rely on first responders to ensure 
compliance, it must do more to inform local, state, and 
national law enforcement about their responsibilities and 
authority.
    Let me close by underscoring that the UAS safety in the 
national airspace is serious business, not only for small 
business, but for every airline passenger and cargo shipper. 
This registered UAS, for example, which is in the 
classification of MicroUAS because it is under 4.4 pounds, can 
fly as high as 6,600 feet for 15 minutes. It could easily end 
up in the airspace I occupy when landing at Baton Rouge or 
Manchester, or any airport, for that matter.
    With ALPA's plan and Congress providing the FAA with a 
long-term stable source of funding through a full 
reauthorization, small businesses can capitalize on the 
opportunities offered by UAS while maintaining our industry's 
extraordinary level of safety.
    Thank you for the opportunity to comment.
    [The prepared statement of Mr. Canoll follows:]
    
    
 [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
   
       
    Senator Ayotte. Thank you, Captain Canoll.
    I want to now call on Mr. Eli Dourado, the Director of 
Technology Policy Program at the Mercatus Center at the George 
Mason University.
    Mr. Dourado.

STATEMENT OF ELI DOURADO, DIRECTOR, TECHNOLOGY POLICY PROGRAM, 
    MERCATUS CENTER, GEORGE MASON UNIVERSITY, ARLINGTON, VA

    Mr. Dourado. Thank you, Senator Ayotte and Senator Booker, 
for the opportunity to come here and testify and comment on 
commercial applications of unmanned aircraft for small 
businesses.
    My name is Eli Dourado, and I am a Research Fellow at the 
Mercatus Center at George Mason University, where I study the 
regulation of emerging technologies and direct Mercatus' 
Technology Policy Program.
    We are at an exciting point in the history of unmanned 
aircraft. I think of drones as occupying a similar position now 
as the internet did in the 1980s. As members of this committee 
know, until 1989, use of the internet for commercial purposes 
was generally prohibited. The removal of that prohibition 
resulted in an explosion of innovation, much of it completely 
unanticipated, that has persisted until today.
    As with the internet in 1989, commercial use of drones is 
highly restricted, but will soon become generally available, 
and as with the internet in 1989, we have only the vaguest idea 
of how drones will be used in daily life in the future. That 
vague picture does include some applications that we already 
understand--using drones for photography and inspecting 
equipment, for evaluating the health of crops, for transporting 
goods with a high value-to-weight ratio. The improvements in 
logistics generated by unmanned aircraft will allow new 
business models, doing for local and small businesses what the 
shipping container and services like UPS and FedEx did for 
global trade.
    But, I want to stress that what are likely to be the most 
important applications of unmanned aerial systems remain 
unknown, just as the most important internet applications were 
unknown when the internet first became commercialized.
    We must, to the maximum extent possible, treat airspace 
with a very light regulatory touch. A regime of permissionless 
innovation in which there is a default position of innovation 
allowed will allow us to reap the greatest gains from unmanned 
systems. I urge every member of this committee to set aside the 
fearmongering that accompanies every new technology and embrace 
the possibilities for innovation and economic growth that 
commercial drones provide.
    To be sure, permissionless innovation is a much more 
controversial proposition for the physical world of commercial 
drones than for abstract information on the internet. What if a 
drone collides with a passenger jet and takes down everybody on 
board? Fortunately, the best evidence shows that commercial 
drones do not pose a serious risk to the airspace.
    To evaluate the danger that drones might pose to 
traditional aviation, my Mercatus colleague Sam Hammond and I 
examined 25 years' worth of wildlife strike data from the FAA. 
This dataset provides an excellent lens through which to view 
the possible danger that drones create for other aircraft.
    U.S. national airspace is home to an estimated ten billion 
birds, and the FAA has reported over 160,000 wildlife strikes 
since 1990. Of those 160,000, only 12 strikes have resulted in 
human fatalities, and of those 12, only one incident involved a 
commercial flight and that incident involved not a bird, but a 
pair of white tailed deer loitering on a runway.
    We estimate that a drone is likely to collide with other 
aircraft about once every 374,000 years of continuous 
operation, and using statistical analysis on the risk that 
birds of different weight pose to humans onboard aircraft, we 
estimate that a two kilogram, or 4.4 pound, drone will cause an 
injury to a human passenger every 187 million years of 
operation. This is well within the realm of acceptable risk.
    Given that drones pose little risk to the airspace, the 
FAA's proposed drone regulations do not adequately protect the 
need for experimentation and innovation. For example, in its 
proposed regulations, the FAA does not allow drones to carry 
external loads. This means that operators may be prohibited 
from delivering items that do not fit within the drone's 
fuselage.
    The FAA does not allow operators to exercise their see and 
avoid responsibilities through technological means, such as 
onboard cameras. This limits drone operations to the operator's 
line of sight, which will needlessly cripple drones' ability to 
operate over longer distances.
    The FAA will not allow drones to operate outside the hours 
of sunrise and sunset.
    The FAA has said that no one will be allowed to transport 
property for compensation via drone without filing for an Air 
Carrier Operating Certificate. This may be prohibitively 
expensive for companies that wish to create small local 
delivery services using drones.
    The FAA has proposed a one drone per operator rule. This 
rule drastically raises the cost for small businesses of 
operating multiple drones.
    Finally, the FAA has so far prohibited drone operation over 
populated areas. Some of the most promising applications of 
drones, such as local delivery services that improve the 
logistical capabilities of small businesses, may only make 
sense in populated areas. This prohibition will simply rule out 
those business opportunities.
    As this committee considers how best to prepare for a 
future in which drones create new opportunities for small 
business, I urge you to insist upon a light touch regulatory 
environment for commercial drones.
    Thank you for your interest in this issue and for the 
opportunity to testify.
    [The prepared statement of Mr. Dourado follows:]
    
   [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
 
   
    
    Senator Ayotte. Thank you, Mr. Dourado.
    I want to thank all of you for being here. I chair the 
Aviation Subcommittee in the Commerce Committee, and this has 
been an issue that we are very interested in addressing and, in 
fact, just yesterday dropped a draft of the FAA reauthorization 
that includes in it some, I think, some important ways to 
integrate unmanned aircraft systems into our national airspace 
system, and I want to thank Senator Booker, because he has been 
very focused on this issue and making sure that we continue to 
reform our framework for handling UAS to spur innovation while 
also we need to make sure that we protect safety and privacy. 
So, I really appreciate your leadership on this issue, and we 
were able to incorporate several of your ideas, and I am sure 
there is more that we can do as we move forward with the FAA 
reauthorization.
    So, I wanted to ask all of you if you have had a chance yet 
to review our draft that has been proposed legislation, or if 
you are still analyzing it, and what your thoughts are.
    Mr. Wynne. I will go first. We are still analyzing it, 
Senator. Thank you very much. But, we were very pleased, and I 
put out a statement yesterday saying we were pleased to see 
that--I mean, there are many things in the bill. But, the 
pieces that we, in particular, have been asking for from 
AUVSI's perspective, the unmanned systems community's 
perspective, we believe are there, and we are speaking 
specifically of a risk-based technology neutral regulatory 
framework, addressing of UTM, for example, unmanned aircraft 
systems traffic management, as an opportunity, trying to pull 
together the research that is going on in disparate areas of 
the government into a more concentrated effort so that we can 
increase the collaboration with industry and get the most for 
the taxpayers' dollar.
    So, we think it is a really good initiative and we urge you 
to move forward with that.
    Senator Ayotte. Yeah. I mean, one of the things that I am 
concerned about is that there are some really terrific 
technologies that I have seen, including crash avoidance 
technology that is being developed, and we need to have 
opportunities to continue to spur that innovation, because you 
can incorporate the safety concerns with some of the 
technological developments.
    Captain, I wanted to get your thoughts.
    Mr. Canoll. Thanks, Senator. We are still reviewing the 
bill, but our initial view is we view this as a safety forward 
bill and we are very pleased that it is out.
    Senator Ayotte. Good.
    Mr. Canoll. We are very encouraged by what we have read so 
far, and particularly the commitment to doing all the safety 
initiatives, or starting the way down the road on a lot of 
these safety initiatives, and it is particularly the UAS. We 
think there is some good information there, as well. So, we 
will continue to review----
    Senator Ayotte. Great. Well, we appreciate it, and I know 
that it just came out, so you are still continuing to review 
the details. But, this is something we want to address. We are 
worried that delaying on it really will continue to keep these 
issues outstanding for UAS in terms of the innovation piece, 
because as Mr. Dourado has pointed out, the framework currently 
in place is not workable on innovation, but also a lot of 
safety issues. So, working on both.
    Mr. Dourado, do you have any comments?
    Mr. Dourado. Yes. Thank you, Senator. I have reviewed the 
bill very, very briefly. I was gratified to see that it is 
extending the 333 exemption process and also making clear that 
the FAA does have authority to extend authorization for beyond 
line of sight and outside the hours of sunrise and sunset.
    I would note that in addition to the 333 process, there is 
a 332 process that the FAA has avoided, and even their current 
proposed commercial rules that were due last September, 
Congress had ordered them to be done under Section 332 and the 
FAA is promulgating those--continues to promulgate those only 
under Section 333. So, asking the FAA to move forward more 
quickly on 332 authorization would be important, in my view, as 
well.
    Senator Ayotte. Okay. Thank you for the feedback. I 
appreciate it very much.
    One of the things that, you know, I have been hearing, and 
I know that Senator Booker raised this, is that we hear that 
other countries are ahead of us in providing a regulatory 
environment for UAS innovation. So, that is one of the 
priorities, I think, that we have, obviously, ensuring that we 
are protecting safety at the same time. So, can you tell me--
Mr. Wynne, can you comment on where other countries are vis-a-
vis the United States of America, and, you know, what 
opportunities we have if we can move forward with the right 
framework here.
    Mr. Wynne. Well, ultimately, we do want global 
harmonization of rules. That will be particularly important for 
larger platforms that are going to travel across international 
borders, of course, and so far, these are the kinds of 
platforms that are getting the vast majority of the attention. 
But, we have many different types of platforms that we need to 
be thinking about, and that is why we are talking about a 
regulatory framework. Some of our platforms are enormous and 
fly above 60,000 feet for days on end, for example, and may be 
able to deliver the internet to the Third World in a much more 
efficient manner than trying to use wires.
    So, there is a lot of different innovation that is going to 
go on here. I, too, am very concerned about competitiveness. We 
watch this issue very, very carefully. There are clearly 
anecdotes--there are anecdotal places around the world where 
there is less regulation or they have moved forward with 
regulation a little bit faster than we have.
    I think if we can move forward with the same kind of 
cadence that we saw with the registration process, which AUVSI 
participated in--both Captain Canoll and I were there with 
Secretary Fox when that was announced, and we urged the FAA to 
move very, very quickly, and they did. If we can increase the 
pace of regulation, I think we can catch back up, and this is 
the largest market for unmanned systems, so I like our chances 
of remaining competitive.
    Senator Ayotte. Does anyone else want to comment on that 
issue?
    Mr. Dourado. I would like to, Senator. I think that Canada 
is governing circles around us right now. In Canada, up to a 25 
kilogram drone you can fly without any special authorization 
for commercial purposes if you simply notify Transport Canada 
of your intention to do so. So, you simply give them notice 
that you are operating within a certain range of exemptions and 
you can operate. So, it is a much more simplified, pro-
innovation stance from the Canadian government.
    Mr. Canoll. The only thing I would add, Senator, is our 
members are seeing--are reporting and encountering the same 
problems at other high-density population centers around the 
globe as they do in the United States. In the low-density 
population areas, like Canada, we do not see it as much because 
they are just not as prevalent and the aircraft operations are 
far fewer. So, we do see problems in London, Paris, around the 
globe.
    Senator Ayotte. Thank you.
    I would like to call on Senator Booker.
    Senator Booker. So, a perfect--first of all, Senator 
Ayotte, I am grateful for your kind words and I just think that 
for the record I want to say that yesterday morning was a 
perfect metaphor for the United States versus the rest of the 
world. As I was running past you on the Mall, I was the United 
States, slow, sluggish, barely moving off the ground----
    [Laughter.]
    You were obviously the innovative countries around the 
globe, because you flew past me at a speed----
    [Laughter.]
    Senator Ayotte. Okay, but in fairness, he had what looked 
like a heavy backpack on his back, which I did not.
    Senator Booker. So, the backpack is empty just so I get 
people to assume that I am running so slow for a reason.
    [Laughter.]
    So, I have outed myself, but please understand that. It was 
a very humiliating moment for me yesterday. I did not want to 
be seen, and I was outed by my fellow Senator.
    Gentlemen, I am grateful for you being here, and I actually 
do not think there is much, Captain Canoll, which as a New 
Jerseyan, which has an incredibly great Italian community, to 
let your name be one vowel short of one of my favorite 
desserts.
    [Laughter.]
    I am very, very grateful that you are here, and I actually 
do not think there is any--there is much conflict between what 
you are saying. I think all the panelists here believe that we 
should be a nation that makes sure that we are safe. And, the 
Air Line Pilots Association, I work with quite a bit, and just 
revere the men and women that do--many of them former military 
people who have made a tremendous sacrifice and commitment to 
our country. So, I am just grateful for everybody being here.
    I just want to dive in real quick. First of all, Mr. 
Dourado, what you said is one of the most important points in 
my understanding of the cycle of innovation, is that we 
routinely underestimate the impact, the economic impact, when 
we have a new innovation. We really never see the true 
potential of that impact. Everybody wants to start talking 
about what this new innovation can do, but nobody gets, from 
the automobile to the television to--if you look at the things 
that were said in those early technologies, they had no clue 
about how transformative they would be and how much economic 
growth would be.
    So, your metaphor in comparing this to the internet, to me, 
is spot-on, and not an exaggeration. Am I right?
    Mr. Dourado. Yes, Senator, and I would note even Paul 
Krugman, who is a great economist, as late as 1998 was 
predicting that the internet would have no more economic impact 
than the fax machine.
    Senator Booker. Right.
    Mr. Dourado. And, it is not--you know, he is a great 
economist, deserved of his Nobel Prize, and he even as late as 
1998 was unable to see everything that the internet would be 
able to provide, so----
    Senator Booker. You are a braver man than me. I would never 
smack talk a Nobel Prize winner----
    [Laughter.]
    So, let us just go where you are right now. I think Captain 
Canoll said it clearly, that other European high-density 
airports are seeing the same problems, not more. They have 
better regulatory regimes for innovation. They are not seeing 
an increased problem. They are seeing basically the same 
problems we are having.
    Mr. Canoll. I am not sure if the statistics would prove 
that out, because we are not sharing information as much as we 
should. That is a great point, that we should be looking across 
other regulatory agencies to gather their information and do 
some comparison.
    Senator Booker. Right, and so that is a really good point 
and I think that is important. We should collect data. As you 
agree, data is important.
    But, what I really want to jump into is even what the other 
countries are doing so much better than us, and even in our FAA 
legislation we just introduced, is we are burdening businesses 
with multiple--each and every different use case, they are 
going to have to run to the government to get yet another 
exception, while what other countries are doing, and it is not 
just Canada--which we should speak nicely about because I hear 
Trudeau is close by--but it is not just Canada. It is France, 
dense country, big cities. They are doing one time going to the 
government, creating a use case. But they are not creating the 
differentiations we are between weight. Is that not so much 
easier and still allows us to have the kind of governmental 
scrutiny on safety that we want?
    And, in the last minute that I have, I would like, Mr. 
Wynne, Mr. Dourado to comment, please.
    Mr. Wynne. Well, I completely agree, Senator, and it is 
clear. I started--I stopped trying to figure out what new 
applications for this technology a long time ago and I started 
trying to think of how it would not be utilized and what 
segments of the U.S. economy would not benefit from unmanned 
systems.
    And, again, we are talking about all manner of things. Some 
of them can be created on 3-D printers very, very rapidly. So, 
we need to have a system that allows for us to move forward 
with that. But, at the same time, we are integrating into an 
airspace which has a very low margin of safety----
    Senator Booker. So, if I may interrupt----
    Mr. Wynne. Please.
    Senator Booker [continuing]. Because I have got 20 seconds 
left, and the Chairman is very rough. So, real quick. Why do we 
have to have multiple check-ins for every new case use as 
opposed to other countries which do it once, far less 
burdensome, far less systems, and far less restriction to small 
businesses?
    Mr. Dourado. I think that is a great question, Senator, and 
I would like to see more done on an ex post basis. So, 
obviously, there will be accidents occasionally with unmanned 
systems, but we can handle them the same way we handle car 
accidents, with cases potentially being litigated in court 
rather than with ex ante precautionary regulation. So, I would 
like to see us moving more towards that ex ante dispute 
resolution mechanism rather than ex pose--or, I am sorry, ex 
post dispute resolution mechanism rather than ex ante 
prohibitions and regulatory prohibitions.
    Senator Booker. Thank you. Thank you very much.
    Thank you, Chairman.
    Senator Ayotte. Thank you, Senator Booker.
    Senator Heitkamp.
    Senator Heitkamp. Thank you, Madam Chairwoman. It is good 
to see you here.
    I think many people on this panel understand the 
contribution that North Dakota is making to this entire 
industry. In fact, the New York Times, I think, called us the 
Silicon Valley of unmanned systems because we have that perfect 
marriage of an airbase that has a number of these systems based 
out of that airbase, a university that basically is one of the 
great aviation universities in the country, and a community 
that is wholly embracing and supporting, along with our 
extended use lease, building out these technologies. So, this 
is a very important industry potential for the State of North 
Dakota.
    But, we also know how important it can be to precision 
agriculture, how important it can be to monitoring 
infrastructure, whether it is a pipeline leak or whether it is 
a power line failure. So, we see these uses in only that big of 
a lens.
    But, I want to confirm what Mr. Dourado said about Canada. 
I recently met with a researcher from UND. She was researching 
wildlife, could have done it in North Dakota, ended up going to 
Canada because she was using unmanned aircraft to do the 
monitoring and it was much easier to get the permissions and 
the authorizations in Canada.
    And, so, we need to remember that it is not just building 
out this technology of the platform, but we are also losing the 
innovation of the utilization of this platform for all of these 
other uses, and so we have got to catch up.
    With that said, there has been a lot of focus today on 
safety, which obviously has to be job one. I asked what the 
FAA's resistance is, why do we wait and wait and wait for 
integration, and I think that no one wants to be the person who 
authorizes something that leads to a catastrophe, and so there 
is a natural pulling back or inability to kind of think about 
it more broadly.
    But, I want to talk about another challenge with this 
technology and that is privacy. You know, we had the very high 
profile case of somebody who shot down a remotely piloted 
aircraft or an unmanned aircraft. Obviously, I think that if 
they shot it down, it probably was flying lower than what the 
person who owned it was saying it was flying. But, we have got 
to not only catch up in terms of the regulatory world, but the 
legal world in terms of who owns the airspace, what is an 
appropriate distance for this aircraft, and how do we make the 
world comfortable, and certainly in the United States, my 
farmers and ranchers comfortable with this utilization.
    Where do you see that? I guess I would ask Mr. Dourado, 
where do you see the privacy implications evolving to the point 
where this technology will be more accepted?
    Mr. Dourado. Well, Senator, I think that the privacy issues 
are different in degree than the privacy issues we have seen in 
the past, but they are not different in kind. So, there were 
privacy concerns when cameras first became available. There is 
a famous law review article in 1890 from the Harvard Law Review 
on the right to privacy and fearmongering about cameras, and 
now we all have cameras and we somehow get along.
    But, it is an important--privacy is an important issue, and 
I think it will be resolved through court cases. The Supreme 
Court in 1946 issued a very important ruling when regular 
aviation was taking off establishing the property rights----
    Senator Heitkamp. To airspace.
    Mr. Dourado. To airspace, saying that you could not 
interfere with the use of a property. So, I think that applying 
that same precedent from 1946, which was very flexible, to the 
modern world, as long as you are not interfering with a 
person's use of their property, then you are not interfering. 
And that could be interpreted to include privacy harms, as 
well. It already exists under the law.
    Senator Heitkamp. I think we are going to have a really 
hard time with that kind of vague definition of what is 
airspace ownership. You know, obviously, if someone believes 
that they have a commercial right to privacy in terms of what 
they are growing, in terms of what they are raising, and 
someone thinks, no, I am the USDA and I am going to fly--I 
mean, I am going to test what is happening on the ground, and I 
am going to tell you what your crop looks like, that is a 
problem for a lot of ranchers and farmers.
    And, so, what I am suggesting is that we need to broaden 
the dialogue here beyond safety, and we need to talk about how 
we manage this new technology in that privacy space. And, I 
think that is something that we have not done all that well.
    In North Dakota, one of the things that we have been able 
to do is put together a committee that not only talks about 
when should you be able to basically deploy this resource, but 
what do you do with the data afterwards, and the for instance 
is, we send one up to monitor traffic out of the hockey arena, 
which is a big deal. I know you guys do not believe that, but 
it is a big deal.
    [Laughter.]
    Monitor traffic out of the hockey arena and then you do not 
need that information, so that information gets deleted out of 
the system and not stored. And, so, those are the challenging 
questions that are being asked in terms of data collection and 
in terms of information, and I think we need to have a broader 
discussion beyond safety about how this resource is used in 
America to protect the privacy rights of landowners, but also 
not irrationally restricting utilization of the resource.
    So, I am out of time, but----
    Senator Risch [presiding]. Senator Ernst, you are up.
    Senator Ernst. Thank you, Mr. Chair.
    I would just like to echo--and, first, thank you for being 
here today. I do appreciate it. And, this is a topic that is 
very interesting and we do need further discussions on. And, I 
would agree with some of the comments that are made already, 
especially as it applies to agriculture in a state like Iowa or 
North Dakota, it is a great tool for our farmers to use if they 
are doing that precision-type agriculture and monitoring, and 
it does eventually save on labor costs, and it makes our 
environment that much the better because we are targeting 
specific weeds in specific areas, not entire fields.
    So, I think there is a lot of great application that we can 
find from these systems, but I wanted to echo the privacy 
concerns that we have, as well, because even in the rural 
areas, it may be a great tool for farming, but you certainly do 
not want somebody else's remotely piloted aircraft or drone 
flying overhead taking pictures of your family as they are in 
the backyard or whatever other methods are being done out 
there. So, those are some concerns.
    Much of Iowa is rural farm ground. I mean, it goes without 
saying. Just like so many of our states, it is so rural. Many 
of these UAS are being operated for agricultural purposes, far 
from the nearest town let alone from the nearest airport. So, 
what do we do to ensure that we are not overburdening some of 
the folks that are utilizing this technology in those types of 
areas? Any thoughts on that?
    Mr. Canoll. Well, Senator, I think there are a couple of 
areas that we can make advances. The technology exists today, 
it is just not fully deployed by the manufacturers--I know they 
are working on getting it into the platforms--called geo-
fencing. So, if it is truly a platform used only for 
agriculture, a very low altitude surveillance, then we have to 
find a way to geo-fence that vehicle from stumbling or 
trundling into airspace. It probably has the capability if it 
is a vehicle strong enough to carry a camera like this one to 
fly very high, 6,000, 7,000 feet.
    So, that technological platform has to be restricted from 
ever operating there, and then we can really mitigate the risk 
to the national airspace and to airliners, for example, or 
general aviation, which we have a very large portion in this 
country, largest general aviation operations in the world by 
far that operate not near airports, they are just puddle 
jumping around, and they have a risk to running into one of 
these vehicles, as well. So, I think technology is the most 
profound way to protect it.
    Senator Ernst. Okay. Any other thoughts, gentlemen?
    Mr. Wynne. Well, Senator, agriculture is probably the 
lion's share of the numbers in our forecast because it is low-
risk flying. In many respects, it is rural, as you say, and it 
is away from people and it is away from other aircraft for the 
most part, unless it is aerial applicators, and we are in a 
very robust discussion with them. So, I think agriculture is 
where we actually expected this technology to take hold very, 
very rapidly, and it is. There is no question that many of the 
exemptions that have been granted by the FAA are for 
agricultural applications.
    Interestingly, it is still early, and because we have not 
gotten to scale yet, because we are flying under exemption, 
agriculture being a low-margin business, it is probably not 
going to take off in the early stages as quickly as we thought. 
But, meanwhile, there are many other applications where we have 
seen tremendous adoption and uptake for the technology.
    The sooner we have got more people flying under rules, the 
sooner we will have datasets, and in aviation, we use datasets 
to figure out what is equivalent level of safety. No question, 
we are going to have the occasional conflict, and that is a bad 
thing in the airspace. But, we will learn from that, as Mr. 
Dourado has pointed out, and I like agriculture because it 
offers us a very low-risk profile, and again, we are looking 
for a regulatory framework that is risk based, because if it is 
technology based, we will never keep up with it from a 
regulatory point of view.
    Mr. Dourado. Senator, I would add that Japan is doing very 
interesting things with drone-based agriculture, and so I think 
that looking to their example and seeing how they are handling 
these issues is also very useful.
    Senator Ernst. Very good. And, I know the FAA has been very 
slow about getting these rules and regulations in place. But, 
if you are an average Iowa farmer, how do you know what those 
rules are, or how are you notified that you need to be 
registering your unmanned aerial system? How do you know that? 
How are they going to know? Is there some sort of registry that 
takes place when they purchase a system?
    Mr. Wynne. A very robust effort. As I said, our ``Know 
Before You Fly'' campaign is pointing people at the resources 
that they need. There are over 80 supporters of that campaign, 
and increasingly, we are reaching out to our colleagues, the 
American Farm Bureau Federation, et cetera, to get information 
in their channels so that it is readily available, not 
complicated information.
    Senator Ernst. Okay.
    Mr. Canoll. Essentially, when you purchase it, you open it 
up, there it is. The information is presented.
    Senator Ernst. Okay. Good. Thank you very much, gentlemen.
    Thank you, Mr. Chair.
    Senator Risch. Thank you, Senator Ernst.
    Senator Markey.
    Senator Markey. Thank you, Mr. Chairman, very much.
    Senator Ernst has put her finger on it. It is the best of 
technologies and the worst of technologies simultaneously. 
There is a Dickensian quality to this technology. It can enable 
and ennoble farmers and Homeland Security officials to protect 
our country, but it can also be used to fly drones over 
people's backyards and photograph children or families in very 
sensitive situations, and we need rules in order to make sure 
that it is clearly understood what these drones can be used 
for. But, we also have to have clear rules in terms of where 
these drones can be flown.
    So, there have been several recent drone sightings near 
airports in Massachusetts, and I am becoming increasingly 
concerned about the threat of a drone colliding with a plane. 
It only takes one drone to fly into the path of one passenger 
plane in order to create one of the worst disasters in American 
aviation history.
    On New Year's Day, a commercial plane spotted a drone 
flying 800 feet in the air nearly one mile from Logan Airport. 
Just days earlier, another drone was reported two miles from 
Logan's runways, also flying at about 800 feet in the air. Last 
month, I sent a letter to the FAA to find out what concrete 
steps the FAA is taking to prevent and respond to drones flying 
in sensitive airspaces.
    Captain Canoll, can you lay out for the committee what the 
dangers are, from your perspective, if we do not have real 
rules and these drones continue to insinuate themselves into 
the airspace of commercial aircraft.
    Mr. Canoll. Yes, Senator. The biggest problem is, and it 
was mentioned in the opening remarks, that we have had a lot of 
wildlife bird strikes. Aircraft are pretty rugged things. I 
have hit many birds in my operations, both when I was flying in 
the Navy and in commercial aircraft. Aircraft pretty much can 
sustain it.
    But, there is a big difference between a bird and a drone 
with a heavy, lithium metal battery, motors, cabling. That is 
going to--this will do significant damage to an aircraft if it 
hits it. A quarter can destroy a jet engine if it goes down the 
intake--destroy it. So, we have both the threat of that and 
then the proliferation, which is an issue for us, as we have 
seen these hundreds of thousands sold in this last holiday 
season.
    So, I think it is important to note, though, that my 
members who are flying around reporting these sightings, we all 
firmly believe that it is not the commercial operator or even 
the serious hobbyist that we are running into. This is the 
hobbyist or the non-commercial operator who really does not 
know what they are doing. So, we need to enhance enforcement. 
We need to enhance enforcement.
    Senator Markey. And, so, what is the area that you think 
should be built around an airport, like LaGuardia or Newark or 
Boston----
    Mr. Canoll. I think----
    Senator Markey [continuing]. Where the air traffic is just 
absolutely massive? How wide a radius should be created?
    Mr. Canoll. The FAA has established five miles, and that is 
a good place to start----
    Senator Markey. But it is not being enforced, is that 
what----
    Mr. Canoll. Well, the problem is, it is hard to enforce it 
because someone can walk into that area with a drone this size 
and just take off and start flying----
    Senator Markey. Yeah.
    Mr. Canoll [continuing]. And you do not know it is there 
until you have had a couple of near misses.
    Senator Markey. And, to what do you attribute the lack of 
enforcement? Is it that the local officials, the state 
officials, the federal officials are not properly signaling to 
all these new drone owners that there is a penalty they have to 
pay?
    Mr. Canoll. I think there is--yes, I think there is a 
coordination issue through the FAA to the law enforcement 
agencies. The other thing I think that we could think about 
from a technology standpoint is we have the ``Know Before You 
Fly'' campaign, and it is presented, as we told Senator Ernst 
before, is you open up the box. You see this pamphlet there 
that you should go to this website and look at it.
    The technology exists to make it so, just like when you 
open up a version of Microsoft Office, you have to enter a key 
code before it will operate. We could do that with our 
recreational drones so that you have to go pass an online test 
which informs you that you cannot operate within five miles of 
an airport, enter that key code before the vehicle will turn 
on.
    Senator Markey. And, I agree with you. We need standards 
and the FAA has to put in place policies that will prevent and 
respond to these new risks and to do so in a way that all new 
drone operators--we are going to have ten million of these, 15, 
20 million of these, and they will be--a lot of them will be in 
major metropolitan areas with so many planes, that without 
clear standards, a catastrophe is just going to happen. There 
are just no two ways about it, like you are saying.
    Thank you, Mr. Chairman, very much.
    Senator Risch. Thank you, Senator Markey.
    Thank you to the panel for taking the time to come visit 
with us today. This is certainly a critical issue that I am 
sure, as with a lot of things with technology, it is in its 
infancy and we are going to learn a lot, and as we move 
forward, hopefully, we will get a lot better at doing this, 
just as we have with the camera, as was mentioned earlier. So, 
thank you so much again. Thank you for coming.
    We will now move to our second panel.
    [Pause.]
    Gentlemen, thank you so much for joining us today. We are 
going to hear from each of you, and I am going to introduce 
both of you and then go from one to the other.
    For the committee, for the witnesses and everyone else, as 
usual around here, we are on a short string. We have a vote 
that starts in 28 minutes, so we will try to be, as usual, 
efficient, but certainly as thorough as we can be.
    Dr. Thomas Vaneck is the Vice President of Disruptive 
Technologies for Physical Sciences Inc. As a small business, 
PSI has been at the forefront of drone technology development 
for years, working on both military and civilian commercial 
applications. Dr. Vaneck leads a team of technologists focused 
on the development and application of multipurpose small 
unmanned aircraft systems called InstantEye.
    Our last witness is Dr. Gregory McNeal. Dr. McNeal is an 
expert on drones and topics related to technology law and 
policy. He is a nationally recognized commentator for Forbes 
and a frequent keynote speaker at industry events and academic 
conferences related to drones, technology, law, and public 
policy.
    So, we will give you each about five minutes to address the 
committee, and then I have no doubt we will have deep and 
probing questions for you.
    So, starting with Dr. Vaneck, if you would, please.

   STATEMENT OF THOMAS W. VANECK, VICE PRESIDENT, DISRUPTIVE 
       TECHNOLOGIES, PHYSICAL SCIENCES INC., ANDOVER, MA

    Mr. Vaneck. Distinguished members of the committee, thank 
you so much for giving me the opportunity to testify today 
about our experience in commercial UAS development and 
operations and working with the FAA.
    At Physical Sciences, a small business, I have the 
privilege of leading a group of talented technologists focused 
on the development and applications of the multipurpose small 
unmanned aircraft system we call InstantEye, and I have 
actually brought InstantEye with me so you can see the size.
    While at first we solely supported the military, today our 
customers include not only the military, but also law 
enforcement, first responders, and a growing list of commercial 
users. Working with military, we broke new ground to push the 
technology to those most in need of it, the individual 
warfighter. This required significant innovation to make the 
system easy to operate, extremely rugged, adaptable to mission 
needs, and low cost. We also created a two-day program of 
instruction to train operators in the use of the system, 
including emergency procedures, and how to service and maintain 
the equipment.
    Much of the technology developed and experience gained 
during this SBIR-supported product development effort has 
successfully been transitioned to the commercial sector. Today, 
supporting commercial customers is one of our greatest growth 
areas. As we expand into these markets, we work closely with 
the FAA to obtain the necessary certifications to conduct 
commercial operations.
    Teamed with a commercial customer in the power and gas 
industry, we applied for and received a Special Airworthiness 
Certificate for InstantEye so we could test its efficacy as an 
inspection tool. We and others have applied for and have been 
granted Section 333 exemptions allowing InstantEye to be used 
for commercial operations. Today, our systems are used to 
inspect power lines, pipelines, wind turbines, solar arrays, 
endangered species habitats, and many others. The list grows 
weekly.
    The process used by the FAA for both the Special 
Airworthiness Certificate and the 333 exemption was to take 
regulations developed for manned aircraft and apply them to our 
unmanned system. When regulations did not quite fit, we applied 
for and were granted exemptions, which kept the safety intent 
of the rule but modified its implementation so that it made 
sense for our small UAS. While the process was tedious, it was 
always apparent that the FAA wanted us to succeed. They also 
did not want to do anything that would break the system. Safety 
always came first.
    We understand that today the FAA is seeking to develop 
rules that are specific to UAS and their operations instead of 
continuing the approach of taking existing manned aircraft 
regulations and modifying them through exemptions. We applaud 
these efforts.
    We firmly believe that, for this process to move quickly 
and to ensure that safety is not compromised, it needs to be a 
collaborative effort between the FAA and the UAS industry. Over 
the last 90 years, the FAA and its predecessor organizations 
have created an airspace architecture that is today the safest 
it has ever been. That experience will be invaluable as we 
enter this next era in aviation.
    Equally important is the knowledge and experience of the 
UAS industry. We know our systems and their limitations. We are 
forever finding new applications for the technology. And we can 
use this knowledge to help suggest regulations that are 
appropriate for this industry, maintain safety, and allow it to 
grow and thrive.
    We also believe in developing UAS regulations, one size 
does not fit all. Rules and operator requirements must be 
appropriate for the system being used and operations being 
conducted. An approach based on the engineering risk model will 
likely be the most successful methodology. Evaluating risk 
encompasses a number of items, including failure analysis, 
probability of injury, probability of property damage, et 
cetera. This will allow us to collect combinations of system 
type and intended commercial activity into groups which we can 
apply safety requirements to and ultimately derive rules.
    Lower-risk activities will require fewer rules on the 
operator and the system, while higher-risk operations will 
require the operator to have greater demonstrated skills and 
the system to have additional capabilities to ensure that an 
equivalent level of safety is met.
    Not only does this approach build on the existing FAA rule 
architecture for manned aircraft--a sport pilot flying a sport 
aircraft does not have to have the same rule burden as does an 
airline transport pilot flying a commercial airliner--it will 
also drive innovation. Clear rules, thoughtfully developed and 
applied, will allow healthy competition by virtue of a level 
playing field and will encourage creative companies to invent 
innovative solutions that both adhere to the rules and also 
create a better mousetrap.
    In summary, the commercial UAS industry represents an 
immense opportunity for our country. It is creating jobs. It is 
driving innovation. And each day we discover yet another 
application for the technology. To realize its full potential 
and to ensure that the United States is a world leader in this 
area will require a close collaboration between the FAA and the 
UAS industry. The rules and operator requirements that are put 
in place must ensure safety and protect privacy to garner 
public trust. This is essential for success.
    Mr. Chairman, members of the committee, thank you for your 
time.
    [The prepared statement of Mr. Vaneck follows:]
    
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    Senator Risch. Thank you, Dr. Vaneck.
    Dr. McNeal.

 STATEMENT OF GREGORY S. McNEAL, J.D., Ph.D., PROFESSOR OF LAW 
   AND PUBLIC POLICY, PEPPERDINE UNIVERSITY, AND CO-FOUNDER, 
                    AIRMAP, SANTA MONICA, CA

    Mr. McNeal. Senator Risch, Senator Booker, members of the 
committee, thank you very much for the opportunity to 
participate in today's hearing on unmanned aircraft systems.
    My name is Greg McNeal. I am a professor at Pepperdine 
University, where my research focuses on unmanned aircraft. I 
served on the FAA's Aviation Rulemaking Committee for UAS 
registration, and I currently serve on the FAA's MicroUAS 
Rulemaking Committee.
    I am also the co-founder of AirMap, a small business that 
provides safety-related software to UAS manufacturers, 
operators, software developers, and key stakeholders like 
airports and universities. We provide the airspace safety map 
for the ``Know Before You Fly'' campaign and approximately 85 
percent of the non-toy, non-military UAS sold today use or will 
use our software, and more than 250 software developers use our 
SDA to integrate our safety software into their own programs 
and into their own UAS.
    From my vantage point as a professor and as a small 
business founder who works directly with UAS businesses ranging 
from one employee to 1,500 employees, I can tell you that these 
individuals are being held back, and it is not just American 
entrepreneurs. Students, educators, journalists, and volunteers 
are ready to use unmanned aircraft to save lives, generate 
significant economic activity, yet they have been held back, 
unable to operate even the smallest of devices because they 
want to use these devices for a purpose that is not strictly 
recreational or hobby.
    Every moment spent without freeing these individuals to use 
unmanned aircraft results in unavoidable deaths and injuries 
from people falling from towers, missed moments to educate 
students about technology, foregone moments of free expression, 
and lost chances to find missing people.
    Since the FAA Modernization and Reform Act of 2012, one 
thing has been clear. Only Congressional action has ensured 
individuals were able to use unmanned aircraft. In Section 332, 
Congress called for UAS operations in the Arctic, and we have 
seen those operations take place.
    In Section 333, Congress created a process for categorical 
exemptions, and we have seen those exemptions and operations 
take place pursuant to those rules, but those exemptions were 
granted on a case-by-case basis rather than categorically, as 
Congress directed.
    In Section 334, Congress directed that public safety 
officials may operate unmanned aircraft weighing 4.4 pounds and 
less, and we have seen those operations take place thanks to 
Congressional action.
    And in Section 336, Congress carved out protections for 
hobby and recreational use of unmanned aircraft weighing up to 
55 pounds, and we have seen such hobby and recreational uses 
take place.
    The trend line is clear. When Congress acts, innovation 
takes flight.
    But despite the Congressionally directed progress of 2012, 
there is more work to be done. Entrepreneurs, students and 
educators, journalists and volunteers have been left on the 
sidelines, and it appears they will continue to be left on the 
sidelines. The only way to secure the benefits of unmanned 
aircraft flight for these important constituents is to create a 
micro classification that prioritizes safety while promoting 
open innovation.
    That is why I am here today to ask Congress and the members 
here to support a MicroUAS classification that empowers those 
who have been left out of the process. The MicroUAS category 
should be focused on simple and straightforward requirements 
that are minimally burdensome and streamlined.
    Specifically, the MicroUAS category should be for 
registered devices that weigh 4.4 pounds or less, that are 
operated within line of sight of the operator, less than 400 
feet above the ground, and which provide notice to the airport 
prior to operating within five miles of that airport.
    By eliminating the distinction between recreational and 
commercial use for the smallest and safest classification of 
UAS, it cuts red tape for entrepreneurs, encourages a safety 
culture based on rules that are easy to follow. It also 
relieves the FAA from the burden of licensing and exempting 
grants for low-risk operations, allowing them to focus on 
important initiatives, like unmanned traffic management.
    Moreover, people strive for compliance when rules make 
sense. However, overly burdensome requirements, including pilot 
certification, aeronautical knowledge testing, traveling to 
test facilities, and retesting every two years will create high 
barriers for low-risk users, increasing the potential for non-
compliance.
    A MicroUAS classification is a reform that will allow for 
operations on terms similar to those already allowed for 
recreational operators, but it would allow entrepreneurs, 
educators, and volunteers to operate unmanned aircraft by 
removing the restrictive recreational or hobbyist purpose 
limitation, focusing instead on the already accepted safety 
standards that Congress put into place in 2012.
    American entrepreneurs, students and educators, journalists 
and volunteers need the support of Congress. History has proven 
that the best way to foster innovation is for Congress to take 
action to empower innovation and protect entrepreneurs. Now is 
the time for Congress to act by creating a MicroUAS 
classification, and I am hopeful that you will be able to 
support that initiative.
    Thank you.
    [The prepared statement of Mr. McNeal follows:]
    
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    Senator Risch. Gentlemen, thank you very much.
    Let me start with the questions. Mr. McNeal, do you feel 
that the--this outfit is not very good at passing corrective 
legislation. It is totally unlike the states, that if they make 
a mistake, they revisit it the next year and correct it. This 
outfit almost never does that. I cannot answer why. Do not kill 
the messenger. I am just saying that is the way it is here.
    So, the question I have for you is, can these be corrected 
by agency rule and regulation, which is obviously much more 
flexible, or does the actual Act need to be revisited?
    Mr. McNeal. Senator, that is a great question. Give 
yourself more credit. Three-thirty-two, 333, 334, and 336, I 
think the body did a pretty good job at crafting a framework.
    But, with regard to your specific question, in my written 
testimony, I suggest some language that would allow for 
Congress to create this very lightweight category, something as 
small as that, or that would fit in the palm of your hands up 
to 4.4 pounds, and then the operator could operate under that 
category, or if a more permissive category is developed by the 
FAA after some additional analysis, they would have the option 
to operate under that. So, it preserves the flexibility while 
giving Congress the ability to act on innovation.
    Senator Risch. That actually sounds like an excellent idea, 
but the question I have is could that be done by rule and 
regulation as opposed to legislation, or is the legislation 
going to have to be revisited?
    Mr. McNeal. So, I actually walked over here from--or I took 
a taxi over from the Department of Transportation, where we 
were talking about the MicroUAS category, and to put that in 
perspective, Senator, we are on a fast timeline to complete our 
recommendation by April 1. And then once that rulemaking 
process begins at the FAA, that rule, if the FAA hits every 
single deadline, simply cannot be enacted until next summer. 
Just, if you just take the timeline of 60 days of----
    Senator Risch. This coming summer or the following----
    Mr. McNeal. The following summer, Senator.
    Senator Risch. We do not move much faster up here.
    Let me ask you this. Being an attorney, I would like to get 
your take on what the state of the law is on this privacy, and 
I understand it is in a state of flux, and I understand that 
common law takes a while to develop. But, I think--I read 
stories all the time, as does everybody else. Some guy walked 
out in his backyard and saw a drone and shot it down because 
his daughter was out there doing whatever. What is the state of 
the law on that right now? Are there sideboards? Have they 
developed standards, or is this still--is there any rule of 
thumb?
    Mr. McNeal. So, I think with any new technology, there is 
obvious sort of apprehension. We can just think back ten years 
when cell phones came out, and the immediate response was, 
these devices should beep every time they take a photo because 
everyone is carrying a camera, and eventually, people got 
accustomed to the technology.
    I think with regard to the laws that are being promulgated, 
we are seeing very different laws coming up in the states. I 
think in the states, existing law really does address a lot of 
the concerns that people have, and we are starting also to see 
that industry is coming together and meeting with those state 
legislators to say, why do we not look to those existing laws 
that might need to be amended rather than creating UAS-specific 
rules. I think that is the right path forward.
    I think the challenge for this body, if it were to 
legislate in this area, is that Montana is not Philadelphia, 
right, and New York City is not Nebraska----
    Senator Risch. How well we know.
    Mr. McNeal [continuing]. And I think we really want to make 
sure that, on the privacy rules, that we do not try to over-
legislate here in a way that would stifle innovation, that we 
entrust the states to handle those types of things under 
existing state law, Senator.
    Senator Risch. Is there any effort by the Uniform Code 
Commission to adopt something like the UCC or something like 
that that----
    Mr. McNeal. There is----
    Senator Risch [continuing]. That states can look at?
    Mr. McNeal. There is an initiative. It is not the Uniform 
Code Commission, I think it is an ALI group that is meeting to 
create a harmonized set of rules. There is also a similar group 
that is trying to create a harmonized set of rules across the 
states for a variety of the other things that we are talking 
about with regard to trespass, privacy, and nuisance, to try 
and ameliorate the concerns about a patchwork of rules and 
regulations cropping up across the states.
    Senator Risch. Thank you very much.
    Senator Gardner.
    Senator Gardner. Thank you, Mr. Chairman, and thank you to 
the witnesses for being here today and your testimony.
    I had the privilege of traveling to where I attended law 
school, the University of Colorado Law School, and a couple of 
years ago, they got a new law school, and so I went and visited 
the old law building, which was still there, and inside the old 
law library is a, I guess a UAS test and flying facility. They 
had this--it looked like a batting cage net up where they were 
flying around UAS, doing all kinds of things. It was the best 
use of a law library I think I have ever seen. At least, I wish 
they were doing that when I was studying there.
    [Laughter.]
    But, I mean, they were doing tremendous work.
    Do we have any idea--do either of you have any idea about 
how much money is right now being put toward research and 
development at various universities' engineering laboratories 
across the country on UAV systems, those kinds of things?
    Mr. McNeal. I do not know the specific dollar amount, 
Senator, but I know that many universities are looking to get 
involved in it. Actually, to tie this back to my testimony, one 
of the challenges that I face is that I want to educate my law 
students about technology, and if I were to take a drone and 
bring my students outside and start flying that drone, I would 
need to get a 333 exemption. I would need to go to flight 
school and become a pilot, all to be able to show my students 
how to use that. And if they were to use it as part of their 
education, that would be deemed non-recreational, non-hobbyist, 
not in conformity with the set of community-based guidelines, 
those students would have to go through a similar process. And, 
so, I have taken to not bothering to show them how UAS work in 
the classroom because of these prohibitions.
    And, so, I think it is Senator Peters that has an act that 
he has proposed to try and free up universities. I think that 
dovetails nicely with the MicroUAS proposal, to free up 
universities to be able to conduct this type of research, to 
help expand STEM education and even reach down into high 
schools and intermediate schools to do the same thing.
    Senator Gardner. Absolutely. And last summer in Colorado 
and across the country, we saw wildfires throughout the Western 
United States, a number of incursions between drones and 
firefighting operations. You have recommended a ceiling of 400 
feet for the MicroUAS classification, but retardant drops are 
usually made from heights of 150 to 200 feet. So, in your 
opinion, what should we be doing to make sure that the likely 
proliferation of micro drones does not further imperil that 
kind of an emergency response situation?
    Mr. McNeal. Yes, Senator. So, these devices would similarly 
be subject to the same hazard restrictions that are already in 
under my proposal, that are already in place. And, so, flight 
within a temporary flight restriction would be a violation of 
the law.
    Additionally, just to tie it back to AirMap and tell you a 
story, a year ago, AirMap started as a company believe that 
unmanned aircraft operators needed accurate and up to date 
information about airspace information, and now approximately 
85 percent of the market gets a live update about where 
temporary flight restrictions are. One of our partners, DJI, 
will geo-fence that temporary flight restriction so that you 
cannot fly into it. Another one of our partners, 3D Robotics, 
provides an alert to the operator, letting them know this is an 
area where you cannot operate.
    And, so, that gives you an idea of the pace of innovation 
when we allow the industry to act quickly in response to 
problems, perhaps to avoid the--because they see the threat of 
legislation or regulation coming, trying to stay ahead of that 
trend, whereas if we get overly prescriptive, what ends up 
happening is we slow them down because they have to meet 
regulations, instead of allowing innovation to address the 
public policy problems.
    Senator Gardner. How does that alert work that you just 
talked about? You said--how would that work to the user, the 
operator?
    Mr. McNeal. Sure. The user, upon opening their system up, 
is immediately provided accurate information about the airspace 
in which they are operating and they would get a pop-up 
notification on the screen letting them know that they are in a 
temporary flight restriction and they are unable to fly in that 
area, and it would give them the exact detailed rationale 
behind why that temporary flight restriction was there, be it 
POTUS movement or a stadium event or a wildfire or any other 
significant event.
    Senator Gardner. Thank you. Thank you, Mr. Chairman.
    Senator Risch. Thank you.
    Dr. McNeal, for those of us that are from the Western 
states--I see a few of us here, four of us here anyway--this 
fire issue has become a real issue. This last summer, we had a 
number of fires. I am sure you had the same thing in Colorado. 
And the firefighters are concerned, and they are having a lot 
of issues with the drones, because it is a natural thing if you 
are a hobbyist or what have you. You want to go out and take a 
picture of that. So, common sense is going to play a role here 
somewhere.
    Well, I have just been ignominiously chastised by the 
Ranking Member for ignoring her and not allowing her to make an 
opening statement. Unfortunately----
    Senator Gardner. Mr. Chairman, that was as much my fault as 
anybody's. I am sorry to the Ranking Member----
    Senator Risch. Well, in my defense, I did not start this 
shindig and I thought you had been here----
    [Laughter.]
    Senator Shaheen. And I did not, either.
    Senator Risch. So, in any event, Senator Shaheen for your 
deep, probing, important remarks.
    Senator Shaheen. Thank you, Senator Risch. It is so nice to 
chastise you.
    Senator Risch. Yes. It is not the first time, I might add.
    [Laughter.]

OPENING STATEMENT OF HON. JEANNE SHAHEEN, RANKING MEMBER, AND A 
                U.S. SENATOR FROM NEW HAMPSHIRE

    Senator Shaheen. Well, thank you very much, and I am going 
to submit my statement for the record, but I would point out a 
couple of things.
    One is that, as both of our witnesses have testified, and 
we thank you very much for being here, unmanned aviation 
presents new opportunities for innovation and for delivering 
services, but it also raises a number of new and serious safety 
concerns. And, as the discussion has pointed out, we need to 
address those safety concerns very thoughtfully and with an 
understanding of what the ramifications of that would be.
    And, I would just point out with respect to wildfires, this 
is something that has been called to our attention in New 
Hampshire, even though we are not a Western state, and I have 
introduced the Wildfire and Emergency Airspace Protection Act, 
which would make it a federal crime to knowingly operate a 
recreational drone that interferes with disaster response 
efforts. So, I do think that is a very serious issue.
    I also want to recognize Dr. Vaneck from Physical Sciences 
Inc., which is a business that is located in Massachusetts, but 
they do some of their work with drones in New Hampshire, so we 
are delighted to have PSI represented here. I had the 
opportunity to discuss with representatives of PSI the 
importance of the SBIR program and what we need to do to 
reauthorize it and, I hope, make it permanent. So, thank you 
for being here.
    [The prepared statement of Senator Shaheen follows:]
    
    
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    Senator Shaheen. My question--I am going to start with you, 
Dr. Vaneck, because I wonder if you could walk us through the 
experience that PSI has had to date with getting involved in 
the commercial drone sector and how the costs and constraints 
have affected your business.
    Mr. Vaneck. Thank you. Certainly. When we first started 
getting into the commercial activities, I want to step back and 
say that, initially, we primarily focused on the military and 
we have a large number of these systems that are in theater 
supporting our military quite successfully.
    It was a logical step to take that to the commercial 
sector. We worked with several commercial companies that wanted 
to use the system for inspection. First, they wanted to 
understand, was it useful for inspection, and then if it was, 
that they wanted to actually put it into operation. We worked 
with an energy company that, through working with the FAA, we 
were able to get a special type certificate for the system that 
allowed us to operate it in the experimental category, and that 
was simply to go and look at the efficacy of using the system 
for those kinds of inspections.
    The process was tedious. The FAA applied manned rules to 
unmanned, but in our viewpoint, they could not do anything else 
because they had a rule set that worked really well. This was 
thrust on them. They had to do something. It took a long time. 
We were able to be successful in getting that type certificate, 
and the system has been used commercially by that company to do 
power line inspections.
    The 333 was a good step, not the last step, I hope, in 
getting to a point where we can now use these commercially. I 
have to say that the process that we went through was not that 
onerous. The FAA emphasized safety. It was on a case-by-case 
basis. We made our pitch to them, and were able to receive the 
333.
    It led us to believe that this risk model is the proper 
approach, and I believe that is the model that the FAA is 
proposing. I will say that categorizing both the risk and the 
type of operation, you get micro systems that will have one set 
of rules. You will have other systems that perhaps want to go 
beyond line of sight, will have a different set of rules. And 
then you will have rules for very large systems, and I think 
that is what makes sense. Thank you.
    Senator Shaheen. Can you also--maybe both of you could talk 
a little bit about the degree of training that should be 
required for drone operators, because on the previous panel--I 
missed it, but I understand that the President of the Air Line 
Pilots Association was here, and that he raised some of the 
concerns around safety and training requirements that the FAA 
is looking at. So, can you speak to that, and then perhaps----
    Mr. Vaneck. I will quickly comment on that. For our 
military customers, it is a two-day approved training course 
that they go through to fully be able to operate the system and 
maintain it. We believe that for the commercial side, anyone 
who is going to operate the system commercially should have 
some degree of training. That could be as simple as an online 
training that you would take and then pass an exam so you 
understand what the airspace is that you are going to be 
operating in and what the rule architecture is. So, we are 
fully in support of that.
    Senator Shaheen. Would you like to comment?
    Mr. McNeal. Yes, Senator. So, I do think that we should 
take a cue from other countries. I just sat through a 
presentation yesterday. The Canadians have segmented up based 
on the weight class and the risk category of the operation 
whether or not someone needs training, and at the low end of 
the spectrum, basically that 4.4 pound and below area, I think 
it would be prudent for us to not require substantial training.
    To put it in perspective, Captain Canoll--I keep wanting to 
say Captain Cannoli, Senator Booker--he put a DJI Phantom on 
the desk. My five-year-old operates that with my supervision. 
It is not a complex device. And if you think about if you were 
trying to sell your home today and you had that, or it was your 
kid's DJI and you wanted to fly up and take a picture of your 
home so you could sell your home, that would be a commercial 
operation.
    Do we expect that that person is going to go through that 
educational process? Probably not. And, so, what we end up 
having is people who are skirting the rules and not complying, 
in the same way that I could have skirted the rules and used 
the device to educate my students, but because I am a law 
professor, I felt it would probably be wrong for me to violate 
the law while educating my students. So, I do think we need to 
key it to the type of operation as opposed to having a blanket 
rule that everyone must go through some formal training.
    Senator Shaheen. Thank you both.
    Mr. McNeal. Thank you, Senator.
    Senator Shaheen. My time is up.
    Senator Risch. Yes, it is.
    Senator Booker.
    Senator Booker. I realize there is a vote coming up, Mr. 
Chairman, and I know Senator Cantwell has not had a chance to 
ask any questions, so I would defer to her.
    Senator Risch. Oh, I am sorry.
    Senator Booker. Okay. Then, I will instead continue with 
questioning. Thank you.
    So, real quick, I have a lot of concerns, as you heard in 
the last panel, about what we are doing to choke innovation and 
through overly burdensome regulation that does not seem to be 
in any way keeping pace with what other countries are doing who 
have the same safety concerns but have an ability to spawn 
innovation that has now seemed to be taking off, no pun 
intended, in other countries, but not taking off here.
    But, I actually want to shift for a second, because this is 
the Small Business Committee, and I would like to know that 
beyond the discussions of what the FAA is doing, how can other 
government agencies actually help small businesses, such as the 
SBA, foster a culture of innovation around UAS, particularly 
for these commercial users? And, I open it up for both of you.
    Mr. McNeal. I think there are a few things that can happen. 
One of the things that we struggled with as a company was just 
being able to access certain types of data and communication 
protocols at the FAA, where the FAA had an approach to allowing 
people to create innovation and participate with the National 
Airspace System in a way where they basically sort of selected 
single contractors who were the only people who could provide 
certain types of approved solutions, rather than creating 
standards to which everyone else could develop.
    So, an example of that was rather than creating standards 
for aeronautical apps that would allow individuals to provide 
information to end users, they instead created their own app, 
which did not get a lot of adoption. And, so, I think flipping 
that focus, calling on agencies to say, here are the standards 
to which we want people to create new software, or here are the 
standards around which we want people to innovate, and then 
free those individuals to innovate and then maybe they get the 
stamp of approval if they have met those broad developmental 
standards. So, that is speaking just to the software category, 
Senator.
    Senator Booker. Great. Any other thoughts?
    Mr. Vaneck. Very quickly, two quick thoughts. One is, I did 
want to go back and talk a bit about the SBIR, very briefly. 
This system would not be in existence today had it not been for 
an SBIR program that got it started. We were able to develop it 
to a point that we had larger agencies providing funding to 
continue on and actually get it into military operations.
    The other is this is an ITAR-restricted piece of equipment. 
Part of our market is going international, as well. There are 
tremendous burdens, and the rule structure is not as clear as 
it could be for us to understand how we push this technology 
out internationally. If we want to compete on the international 
stage, I have to be able to put my technology into the 
international market, and I think we need some--a look at the 
ITAR restrictions that are placed on these types of 
technologies to ensure that we are not burdening it--overly 
burdening it so it does open those markets up.
    Senator Booker. And it puts you at a competitive 
disadvantage to other companies that might be----
    Mr. Vaneck. Yes, Senator, it does.
    Senator Booker [continuing]. Other countries. And, again, 
this goes to that point about how we are really undermining 
innovation, economic growth, jobs, because we are doing things 
to our businesses and innovators that other countries are not, 
and they are not having these horrible safety disasters, and 
they are taking a focus on safety, but they are not creating 
these regulatory burdens.
    And, so, just for an example, either of you, how long does 
it take for a typical small business--not the people who--the 
individual users who crash into the White House lawn and things 
like that, but I am talking about for a business that is trying 
to use and innovate an application, how long does it take for a 
small business to apply for an exemption through the FAA? I am 
just curious, just for the record.
    Mr. McNeal. Well, worse than the exemption process, 
Senator, would be the fact that if we just decided to start 
today, it would take 120 days at the long end, but they have 
really narrowed that gap down to about 60 days, to approve the 
exemption. But, then you would have a piece of paper----
    Senator Booker. Wait----
    Mr. McNeal. You would need to learn how to fly. You would 
need to go fly a Cessna and fly for 20 hours before you could 
fly that--what is it, 200 grams--that tiny 200-gram device. You 
would need to know how to land a manned aircraft.
    Senator Booker. Right. And, right now, there is a backlog 
at the FAA----
    Mr. McNeal. There is a backlog, right, and now people--and, 
so, I think people are sitting on the sidelines, too, hoping 
that--the people that last summer were sitting, expecting that 
Congress would hit the deadline--I mean, the FAA would hit the 
deadline Congress gave them. They did not file for their 
exemption. Then they heard there would be a delay. They did not 
file for their exemption. And now, some of them are probably 
kicking themselves for having not filed the exemption. The 
regulatory process takes a long time because the agency has to 
run all of its traps.
    Senator Booker. And, let us just be clear. Right now in 
America, we are killing innovation as a result of this. We are 
killing jobs. We are undermining the life-saving potential that 
this technology could have for our own communities. And this is 
just a regulatory regime that desperately needs to be changed.
    Mr. McNeal. I one hundred percent agree, Senator.
    Senator Booker. Thank you very much.
    Senator Gardner [presiding]. Thank you, Senator Booker.
    Had I known that we were bringing some of these visuals, I 
have a Millennium Falcon drone in my office I could have 
brought here, too, so----
    [Laughter.]
    Mr. McNeal. Do not fly it commercially, Senator.
    Senator Gardner. No, no, no. After some experiences, I am 
pretty sure nobody would want me to do that.
    [Laughter.]
    I guess Senator Markey is next.
    Senator Markey. Okay. Thank you, Mr. Chairman, very much.
    PSI is a perfect example of why we have Small Business 
Innovation Research grants. It is an amazing number, just for 
Massachusetts, but there have been 20,000 SBIR grants to 
Massachusetts companies totaling $5 billion. That is the 
program that has been authorized by this committee year after 
year, and those 20,000 grants have helped to create, just to 
Massachusetts companies like PSI, and PSI, Physical Science 
Incorporated, to be distinguished from PSI, pounds per square 
inch, where Bill Belichick is the expert----
    [Laughter.]
    Notwithstanding what anyone who comes from any other state 
might believe is accurate.
    So, we thank you, Dr. Vaneck, for your incredible 
innovation at your company.
    Can I turn just for a second, then, to the privacy issues. 
Obviously, right now, there are no rules in terms of the 
gathering of information and how they can use it, how they can 
sell it, and clearly, there have to be rules. You just cannot 
allow these drones to be hovering over people's backyards and 
taking pictures. You know, it is one thing to say it is great 
for Amazon to be able to deliver a package, but what about the 
film now that is in there as they are hovering around the home? 
What is the rule for the reuse or resale of all of that 
information, especially if it is related to children in the 
family?
    So, in a way, for the purposes of public safety or the 
purposes of helping the agriculture sector to better monitor 
what is occurring, there are eyes in the sky, and that is 
great, but there is also a spies in the sky aspect to all of 
this that, clearly, we have to talk about, as well.
    And, last year, I actually introduced the Drone Aircraft 
Privacy and Transparency Act, which establishes safeguards to 
protect the privacy of individuals from the expanded use of 
drones. We need guidelines, especially with regard to 
information gathered about children in our society.
    So, could you, Dr. Vaneck, talk a little bit about how PSI 
ensures that drones are protecting the privacy of those on the 
ground.
    Mr. Vaneck. Certainly. Thank you, Senator Markey.
    Actually, the privacy concerns, I share them, as well. When 
we worked with the power and gas company, I will tell you that 
certain operations that they conducted, inspecting these power 
lines, they would only inspect from one direction, because if 
they inspected from the other direction, in the view would be a 
farm, and they knew that that farmer was very concerned about 
privacy. So, they conducted their operations so as to not to 
impinge.
    I think it actually can drive innovation. If you pull up 
Google Maps, you will see that license plates are blurred. 
Faces are blurred. Even signs on buildings, which, 
unfortunately, when I am trying to find that building make it a 
little difficult, but they are blurred.
    We have a lot of the technology already starting to be in 
place that we can apply to this as far as the video feeds and 
even other data that we collect. So, I think it can drive 
innovation. We are actually----
    Senator Markey. You think the solution to the problem lies 
in innovation itself.
    Mr. Vaneck. Yes, absolutely.
    Senator Markey. Like Google Maps.
    Mr. Vaneck. Absolutely, and I think we can begin to apply 
that. I think there needs to be rules in place that say this 
has to occur----
    Senator Markey. Yes.
    Mr. Vaneck [continuing]. And that will drive innovation. It 
will get the three guys in a garage who come up with a great 
idea that then will deploy across the entire industry.
    Senator Markey. And, so, that then basically says that the 
FAA could say that this technology, such as Google Maps, which 
blurs faces, blurs that kind of personal information, should 
then be applied here, and once it is adopted, then you have got 
a balance between the innovation and the use of the technology, 
but also in the protection of the privacy of individuals.
    Mr. Vaneck. I would say that I am not sure the FAA is the 
organization to do that----
    Senator Markey. Yes.
    Mr. Vaneck [continuing]. Because they are safety-related. 
But, I believe that there are rules that can be put in place by 
organizations to ensure that that takes places.
    Senator Markey. Yes, and I agree with you a hundred 
percent. And, again, we thank you. We are proud of having PSI 
up in Massachusetts. Thank you.
    Mr. Vaneck. Thank you.
    Senator Gardner. Thank you, Senator Markey.
    Senator Cantwell.
    Senator Cantwell. Thank you, Mr. Chairman.
    Dr. Vaneck, I wanted to ask you, NASA has been working on a 
drone transportation system to basically monitor the ability to 
fly safely on altitudes under 500 feet, and yesterday, the 
Senate introduced a FAA bill that had a pilot program on that. 
So, do you think that a traffic management system can be safely 
put in place for drones so that they can--we can get that 
network operating?
    Mr. Vaneck. I believe it can. There are already activities 
now for micro radars that are able to, not today, but very soon 
will be able to track aircraft as small as our aircraft. The 
other advantage to something like that is it can track 
individual birds around airports. You have heard from pilots of 
bird strikes. If that radar were to exist, they could alert 
pilots of individual birds.
    Of the management system, commercial airliners today have a 
system on board where the aircraft themselves talk to other 
aircraft. It is called TCAS. Those kinds of technologies will 
be available for these small aircraft, I think, in the future. 
Again, it drives innovation. We are going to have the necessity 
to have those kinds of technology in place, and we will have to 
develop the technologies to do it.
    Below a certain size limit and the operation type, it may 
not make sense, it may be too much of a burden for line of 
sight, because you have an operator and an observer who are 
keeping clear of other traffic. But, for example, beyond line 
of sight, we certainly need a technology like that.
    Senator Cantwell. Well, if you could--I mean, obviously, 
with a digitized system, everything could be monitored. I think 
my colleague, Senator Risch brought up this issue as it related 
to fire, which is a perfect example. We definitely believe that 
drones could be a huge asset in helping us track and monitor 
fire starts. At the same time, literally, we had aircraft who 
were fighting the fires having to physically suspend and set 
down because hobbyists' drones were flying in the area, and 
they could not risk the safety.
    So, that is a perfect example of the need for a traffic 
management system, if you will, and a communications system. 
Not everybody probably understood where every fire was, given 
that they were so immense across our state, anyway. So, it was 
pretty hard to go and identify and tell everybody, you know, a 
drone APB. Do not fly. We have firefighters flying their 
missions. But, so, if you had a system, you obviously could see 
that system and identify and communicate with it.
    Mr. Vaneck. Absolutely. We are actually developing 
technologies now so that this system can be used by smoke 
jumpers for fighting wildfires, for looking for hot spots using 
thermal cameras, for having just an SOS that the firefighters 
are in trouble and you can send up an SOS. Right now, it is 
humans deconflicting the airspace. We need to move that to a 
technological solution to take the human out of the loop and 
have that information both sent throughout the infrastructure 
that is fighting the fire, but to everyone else, as well, with 
geo-fencing and other things to prevent the other users from 
being in that airspace.
    Senator Cantwell. So, do you believe the FAA's 333 is 
fostering this environment of voluntarily compliance, and do 
you think that that works to achieve that goal?
    Mr. Vaneck. The--as I said, the 333 was not an onerous task 
for us. It did take a long time. It was about 160 days for us 
to receive our 333. The real issue, and it has been mentioned 
by others, having someone have to be a pilot, a manned aircraft 
pilot, to be able to operate this is a burden that is just too 
far.
    Senator Cantwell. That is not where our international 
counterparts are.
    Mr. Vaneck. That is not where our military is. Most of the 
operators that we have in the military are not pilots. They 
have other jobs to do, but this is a technology that they use 
for life saving, for other things.
    Senator Cantwell. So, are we losing ground to international 
competitors because we are not----
    Mr. Vaneck. Yes, Senator. Absolutely.
    Senator Cantwell. Well, I definitely believe that we need 
to fix and address that. We need--this is unbelievable 
applications, life saving applications, information saving 
applications. I just think about what we need to do with fire 
and fire-wise, making sure that we attack fire starts right 
away. This kind of data and information would give us a 
perspective that is just invaluable. So, I hope we can figure 
out how to move faster as the U.S. and not be left behind the 
international marketplace. Thank you.
    Senator Gardner. Thank you, Senator Cantwell.
    Senator Shaheen.
    Senator Shaheen. I just wanted to make a final comment, and 
that is, as we talk about the challenges at the FAA, one of the 
things that would help a lot to allowing them to move forward 
more expeditiously is to reauthorize the FAA so they do not 
have to worry about what is going on with their life span. And, 
just as we need to reauthorize the SBIR program, we need to 
make sure that the FAA is operating, that they know what they 
are expecting, and that this is critical. As we talk about 
innovation, we should not be doing things here in Congress that 
hinder the innovation that we need in the country.
    So, thank you both very much for your testimony.
    Senator Gardner. Thank you both for your contribution and 
testimony today. We are in the middle of a vote, so we are 
going to go ahead and conclude the hearing. Very informative 
and, obviously, important to balance the safety, the safe 
integration of unmanned aircraft into our nation's airspace 
without stifling small business growth and innovation.
    Thank you very much for being here, and this hearing is 
adjourned.
    [Whereupon, at 11:45 a.m., the committee was adjourned.]

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