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23–768 2017

OPPORTUNITY RISING: THE FAA’S NEW REGULATORY FRAMEWORK FOR COMMERCIAL 

DRONE OPERATIONS 

HEARING 

BEFORE THE

SUBCOMMITTEE ON INVESTIGATIONS, OVERSIGHT 

AND REGULATIONS 

OF THE

COMMITTEE ON SMALL BUSINESS 

UNITED STATES 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED FOURTEENTH CONGRESS 

SECOND SESSION 

HEARING HELD 

SEPTEMBER 27, 2016 

Small Business Committee Document Number 114–073 

Available via the GPO Website: www.fdsys.gov 

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Congress.#13
(II) 

HOUSE COMMITTEE ON SMALL BUSINESS 

STEVE CHABOT, Ohio, Chairman 

STEVE KING, Iowa 

BLAINE LUETKEMEYER, Missouri 

RICHARD HANNA, New York 

TIM HUELSKAMP, Kansas 

CHRIS GIBSON, New York 

DAVE BRAT, Virginia 

AUMUA AMATA COLEMAN RADEWAGEN, American Samoa 

STEVE KNIGHT, California 

CARLOS CURBELO, Florida 

CRESENT HARDY, Nevada 

WARREN DAVIDSON, Ohio 

NYDIA VELA ́ ZQUEZ, New York, Ranking Member 

YVETTE CLARK, New York 

JUDY CHU, California 

JANICE HAHN, California 

DONALD PAYNE, JR., New Jersey 

GRACE MENG, New York 

BRENDA LAWRENCE, Michigan 

ALMA ADAMS, North Carolina 

SETH MOULTON, Massachusetts 

KEVIN FITZPATRICK, Staff Director 

JAN OLIVER, Chief Counsel 

ADAM MINEHARDT, Minority Staff Director 

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(III) 

C O N T E N T S 

OPENING STATEMENTS 

Page 

Hon. Cresent Hardy ................................................................................................. 1 

Hon. Alma Adams .................................................................................................... 2 

WITNESSES 

Mr. Gabriel Dobbs, Vice President, Business Development and Policy, Kespry 

Inc., Menlo Park, CA, testifying on behalf of the Small UAV Coalition ......... 4 

Mr. Brian Wynne, President & CEO, Association for Unmanned Vehicle Systems International, Arlington, VA ...................................................................... 6 

Mr. Jonathan H. Daniels, President, Praxis Aerospace Concepts International, 

Inc., Henderson, NV ............................................................................................. 7 

Ms. Lisa Ellman, Partner, Hogan Lovells US LLP, Washington, DC ................. 9 

APPENDIX 

Prepared Statements: 

Mr. Gabriel Dobbs, Vice President, Business Development and Policy, 

Kespry Inc., Menlo Park, CA, testifying on behalf of the Small UAV 

Coalition ......................................................................................................... 25 

Mr. Brian Wynne, President & CEO, Association for Unmanned Vehicle 

Systems International, Arlington, VA ......................................................... 32 

Mr. Jonathan H. Daniels, President, Praxis Aerospace Concepts International, Inc., Henderson, NV ..................................................................... 36 

Ms. Lisa Ellman, Partner, Hogan Lovells US LLP, Washington, DC .......... 45 

Questions for the Record: 

None. 

Answers for the Record: 

None. 

Additional Material for the Record: 

DJI ..................................................................................................................... 52 

NAMIC (National Association of Mutual Insurance Companies) ................. 53 

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(1) 

OPPORTUNITY RISING: THE FAA’S NEW REGULATORY FRAMEWORK FOR COMMERCIAL 

DRONE OPERATIONS 

TUESDAY, SEPTEMBER 27, 2016 

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON SMALL BUSINESS, 

SUBCOMMITTEE ON INVESTIGATIONS, OVERSIGHT AND

REGULATIONS

Washington, DC. 

The Subcommittee met, pursuant to call, at 11:00 a.m., in Room 

2360, Rayburn House Office Building. Hon. Crescent Hardy [chairman of the Subcommittee] presiding. 

Present: Representatives Hardy, Hanna, Davidson, Vela ́zquez, 

and Adams. 

Chairman HARDY. Good morning. I would like to call this hearing to order. 

We are bearing witness to the next great aviation renaissance. 

Advances in technology have cleared the way for a reality that, 

only a short time ago, was merely a dream. From the delivery of 

goods to the survey of land, unmanned aircraft systems, otherwise 

known as UAS or drones, are poised to change how we do business. 

And with the initial report indicating that the overwhelming majority of companies operating UAS for commercial purposes have 10 

employees or less, this industry will truly be a small business industry. 

Our airspace, however, is not alone in its experiencing of the 

shifting environment. The office charged with overseeing our civil 

aviation industry, the Federal Aviation Administration, is racing to 

keep pace with the progress being made, on the ground and in the 

air, by small businesses across the country. As the FAA moves forward in an effort to fully integrate UAS into the national airspace 

system, the safety of those in the air and on the ground, and privacy concerns that many citizens hold dear, must be balanced with 

the needs of this industry. This balance must be achieved for economic possibilities and efficiencies to become a reality. 

In my home state of Nevada, which is one of the six FAA selected 

UAS test sites, businesses are taking steps to innovate and test 

their ideas for commercial application. However, and I saw this in 

my district, a lack of guidance from the FAA regarding our skies 

was prohibiting companies from taking much needed next steps. 

To address some of the uncertainty and provide a time framework for the future, FAA took a major step forward by finalizing 

the rules for civil operation of small UAS this summer. Located 

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2 

within Section 14 of the Code of Federal Regulations, the new rule 

created Part 107 and includes requirements and some flexibilities 

for operators of small unmanned aircraft, those that weigh less 

than 55 pounds. 

Today, the Subcommittee will hear from industry participants on 

how the rules are impacting their businesses and their future plans 

now that we are approximately a month into the implementation 

of Part 107. I am looking forward to hearing of the new rule and 

how it is allowing businesses in the unmanned aircraft industry to 

make important strides needed in this sector to continue growing 

and innovating at a rapid pace. 

I appreciate all the witnesses for being here today. I look forward 

to your testimonies. 

I now turn the time over to the ranking member for her remarks. 

Ms. ADAMS. Thank you, Mr. Chairman, for holding this important meeting. Madam Ranking Vela ́zquez, thank you for being here 

as well. 

As we have progressed further into the 21st Century, technology 

has become increasingly more sophisticated. This development has 

brought new opportunities to the United States and the global 

economy, which provides exciting new pathways on the road to innovation. 

At the forefront of this innovation is the commercial use of 

drones in civilian life, drones which have been mainly used in military intervention are now becoming commonplace within our lives. 

Civilian drone use offers aerial information and transportation 

services that are time and cost efficient and useful in a variety of 

markets. In fact, some companies seek to utilize drone technology 

for deliveries of consumer goods, while others like real estate professionals use them for marketing purposes. Drone technology has 

the potential to change our lives, and as with any new development, there must be more discussions of just how much of an impact they will have. Civilians have, and will continue to have, more 

and more usages for drones in their daily lives for personal and 

commercial use. But most importantly, small businesses have a 

particular interest in drone technology because they are not only 

users of these drones, but also manufacturers. 

These interests have now pushed this issue to the forefront of 

importance and relevance. The Federal Aviation Administration 

regulations appear to be beneficial not only for our overall economy, but also for small firms. The FAA estimates that more than 

7,000 businesses will obtain drone permits within 3 years. 

Today’s hearing gives us the opportunity to learn more about the 

final regulations and how they will impact small businesses. I look 

forward to hearing the insights of our witnesses, and I thank you 

all for being here today on the lasting implications of drone technology on our economy. 

Thank you very much. I yield back the balance of my time, Mr. 

Chair. 

Chairman HARDY. First of all, I would like to explain how we 

work around here. If the Committee members have an opening 

statement, I would ask that they submit it for the record. 

I would like to take a moment to explain the timing on the 

lights. You will each have 5 minutes. It will begin green, and as 

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3 

your time gets down to 1 minute it will turn yellow. And at the end 

of 5 minutes it will turn red and we would appreciate you trying 

to keep within those guidelines if you can. 

Now I would like to introduce our witnesses here today. First, I 

would like to introduce our first witness, Mr. Gabriel Dobbs. He is 

the vice president of Business Development and Policy for Kespry 

in Menlo Park, California, and is working to help customers use 

the Kespry UAS to collect and analyze data. At Kespry, Mr. Dobbs 

works with civil aviation agencies around the world to craft policy 

for the next generation of UAS. In 2014, he secured the first section of the 333 exemption for drone operations in construction in 

the United States. Mr. Dobbs was recently selected for Forbes 30 

under 30 list of having an impact on law and policy in the United 

States. Mr. Dobbs has earned his law degree and master’s degree 

from Stanford University. Prior to Kespry, he worked with Google, 

23andMe and SpaceX in various roles. Thank you for being here. 

Thank you for bringing a sample of your product. 

Our next witness is Mr. Brian Wynne. Mr. Wynne is the president and CEO of Association for Unmanned Vehicle Systems International (AUVSI). AUVSI is the largest trade association representing the unmanned systems in the robotics industry. Mr. 

Wynne has significant transportation and technology experience. 

He has served in the executive position at the Electric Drive Transportation Association, the Intelligent Transportation Society of 

America, and the Association for Automatic Identification and Mobility. Mr. Wynne holds a bachelor’s degree from the University of 

Scranton, and a master’s degree from John Hopkins University. 

Thank you for being here. 

Next, we have Mr. Jonathan Daniels. Our third witness is the 

president of Praxis Aerospace Concepts International, Inc., in Henderson, Nevada. Praxis is a service-disabled, veteran-owned small 

business that provides practical solutions for multi-modal-ground, 

air, sea, and industrial-robotics and unmanned systems. As president of Praxis, Mr. Daniels leads the design and management of 

Aerodrome LLC, the ‘‘teaching airport’’ that provides technical education and training to future and current aviation professionals. 

Mr. Daniels has served in the U.S. Army for 23 years and is a retired officer. He holds a bachelor of science from Excelsior College, 

and a master’s degree from Kaplan University, and a graduate certificate in strategic studies from the U.S. Army War College. Mr. 

Daniels, thank you for your service. 

With that, I would like to turn the time over to Ms. Adams for 

our next witness. 

Ms. ADAMS. Thank you, Mr. Chair. 

It is my pleasure to introduce Lisa Ellman. Ms. Ellman is a partner at Hogan Lovells where she co-chairs the firm’s unmanned aircraft systems practice, a group dedicated to helping businesses succeed in the dynamic UAS market. Prior to entering private practice, Ms. Ellman held top-level positions in the Obama Administration and the U.S. Department of Justice. Most recently, she led 

DOJ’s effort to develop policy that would govern the use of UAS in 

the United States and represented the DOJ in the Federal interagency process considering UAS-related policy issues. She holds a 

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4 

joint J.D./M.P.P. from the University of Chicago, and a B.A. from 

the University of Michigan. Welcome, Ms. Ellman. 

Chairman HARDY. Thank you all for being here again. 

Mr. Dobbs, we will begin with you. You have 5 minutes. 

STATEMENTS OF GABRIEL DOBBS, VICE PRESIDENT, BUSINESS DEVELOPMENT AND POLICY,KESPRY INC.; BRIAN 

WYNNE,PRESIDENT & CEO,ASSOCIATION FOR UNMANNED 

VEHICLE SYSTEMS INTERNATIONAL; JONATHAN H. DANIELS; PRESIDENT, PRAXIS AEROSPACE CONCEPTS INTERNATIONAL, INC.; LISA ELLMAN, PARTNER,HOGAN LOVELLS 

US LLP 

STATEMENT OF GABRIEL DOBBS 

Mr. DOBBS. Thank you. 

Chairman Hardy, Ranking Member Adams, and distinguished 

members of the Subcommittee, thank you for the opportunity to 

testify today on behalf of Kespry and the Small UAV Coalition. 

This is both an exciting and critical time for the commercial unmanned aerial systems (UAS) industry, and I appreciate the opportunity to discuss Part 107, particularly as it impacts small businesses like Kespry. 

I would also like to thank the Small UAV Coalition, the first 

group of its kind focused solely on commercial drone operations, for 

its leadership in working with policymakers and regulators to develop a robust, yet flexible framework that will no longer be built 

around exemptions and exceptions. Thanks to its hard work, this 

industry is now ‘‘open for business.’’ 

Like many small businesses across the country, Kespry was 

started on the floor of an apartment by a few college graduates 

passionate about the promise of drone technology and its potential 

to have meaningful impact on businesses around the world. Today, 

Kespry has been in business for over 3 years. We have customers 

operating drones in every state, generating millions in revenue. We 

now employ over 60 people and continue to grow aggressively. 

Kespry is a ‘‘made in America’’ business. We design and manufacture our fully integrated drone systems entirely in the United 

States. 

Kespry’s mission is to create technology that significantly advances the effectiveness, efficiency, and safety of workers in the 

real world. This can mean everything from creating a 3D model of 

hard-to-reach areas of construction, to inventory management, to 

identifying damage on structures faster to help homeowners and 

businesses get back on their feet after a major storm. 

The drone industry, particularly the commercial sector, also represents a largely untapped market that stands to add billions of 

dollars to our economy. One recent report estimated that the commercial drone segment will grow to a $21 billion industry within 

5 years. This growth will allow American companies of all sizes, including small businesses, to create countless high-paying, highlyskilled jobs, but none of this is possible without Part 107 and subsequent rulemakings that open the skies to commercial drones 

while maintaining the highest safety standards. 

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Two years ago, the drone revolution was just beginning and the 

FAA had devoted very limited resources to small UAS. Operators 

had to ask the Secretary of Transportation for permission to ignore 

certain federal regulations on the books relating to aircraft, since 

these regulations treated a small drone the same as a Boeing 777. 

In late 2014, the first so-called Section 333 exemptions were 

granted. However, the many conditions and limitations on the 

FAA’s exemption authority were commercially impractical and significantly limited the growth of the small UAS industry, leading 

many companies to conduct operations in other countries where 

regulatory advances had been made more quickly. 

Kespry worked with partners from the Small UAV Coalition to 

help the FAA create a rule that put robust safety precautions in 

place for small commercial operations, while eliminating many of 

the categorical restrictions in the proposed rule that would have 

been economically impractical with no material impact on safety. 

From the moment it went into effect on August 29th, Part 107 

was a huge improvement over the Section 333 process. First, commercial operators no longer need to petition for the FAA approval 

if they plan to operate within the scope of the rule. Second, the 

FAA no longer requires UAS pilots to have manned aircraft flying 

experience, which has little correlation to the skills required to 

safely operate UAS. 

While Part 107 is a solid first step towards a comprehensive regulatory framework for commercial drone operations, there are several key components that the FAA must address expeditiously or 

American companies will lose out to foreign competitors eager to 

invest in this developing technology. 

As urged by the Small UAV Coalition, Part 107 allows operators 

to seek a waiver from several regulatory limitations, perhaps most 

notably to operate at night, directly over people, and beyond the 

visual line of sight. These elements are critical to the successful 

and widespread integration of commercial drones into the national 

airspace that will help create tens of thousands of jobs. Time will 

tell whether the waiver process will be more efficient and flexible 

than the Section 333 exemption process. 

While we appreciate that Part 107 allows for such waivers, the 

FAA’s next phase of regulations must provide for even more efficient approval of these type of operations. Technology already exists that ensures safe beyond visual line of sight operations and 

eliminates the need for operators to seek waivers on a case-by-case 

basis, a burdensome endeavor for both companies, especially small 

businesses and the FAA. 

Equally as critical to realizing the full potential of commercial 

drone applications is the ability to safely operate UAS over populated areas. The FAA has announced its intention to publish a proposed rule for operations over people for public comment before the 

end of the year. We hope that the FAA will act expeditiously to finalize this rulemaking and that the proposed rule will recognize 

that very light UAVs pose the least risk and therefore could be permitted to operate over people under certain circumstances without 

compromising safety. A micro UAS classification would create an 

even more efficient regulatory framework, further reducing the 

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6 

burden on small UAS operators without creating any significant 

safety concerns. 

As you can see, the commercial drone industry standards to deliver major economic and consumer benefits that will allow businesses of all sizes to thrive. Part 107 is a positive first step in developing a comprehensive regulatory framework for small commercial drone operations. It is also proof that it is possible to boost opportunities for American innovation and manufacturing without 

being overly prescriptive and hindering industry’s ability to compete. 

Thank you for the opportunity to appear before you today. 

Chairman HARDY. Thank you, Mr. Dobbs. 

Mr. Wynne? 

STATEMENT OF BRIAN WYNNE 

Mr. WYNNE. Thank you, Mr. Chairman, Madam Ranking Member Adams. It is a pleasure to be here before the Committee today 

on behalf of the Association for Unmanned Vehicle Systems International, the largest not-for-profit organization serving the unmanned systems and robotics community. We have more than 

7,500 members, including many small businesses that support and 

supply this innovation industry. 

From inspecting pipelines to surveying bridges, to filming movies, UAS helps save time, save money, and most importantly, save 

lives. It is no wonder why thousands of businesses, small and large, 

have already embraced this technology. We now have initial regulations governing civil and commercial UAS operations, which means 

even more businesses are cleared for takeoff. While these regulations have been in effect for less than a month, there is strong evidence that the commercial UAS market is poised for significant 

growth, particularly among small businesses. Let me explain. 

On August 29th, the Federal Aviation Administration implemented the small UAS rule. The rule established a flexible, riskbased approach to regulating UAS. This new regulatory framework 

helps reduce many barriers to low risk, civil, and commercial UAS 

operations, allowing businesses to harness the tremendous potential of UAS. 

It is clear that businesses are eager to take off. On the first day 

that the rule went into effect, more than 3,300 people had already 

signed up to take the aeronautical knowledge test, a requirement 

under the new rule. Of the more than 530,000 people who have 

registered their UAS with the FAA since last December, about 

20,000 have indicated that they are commercial operators. The 

FAA expects that more than 600,000 UAS could be flying for commercial use over the next year. 

Even before the rule, thousands of businesses had received approval to fly under Section 333 of the 2012 FAA Reauthorization 

Act. The FAA started granting these exemptions in September 

2014 and approved more than 5,500 by the time the rule took effect. These exemptions provide a window into how the commercial 

market is taking shape. AUVSI found that more than 5,200 distinct 

businesses received approval to fly, the vast majority of which were 

small businesses. Over 90 percent earn less than 1 million annually and have fewer than 10 employees. For example, one of these 

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businesses is Las Vegas-based Verascan. It provides imaging, mapping, and surveying services to Nevada’s agriculture, mining, construction, and oil and gas industries. Recently, it provided aerial 

survey data to assist in the construction of the I-11 Boulder City 

bypass, part of a proposed highway link between Phoenix and Las 

Vegas. 

This is just one of many businesses around the country taking 

advantage of this emerging technology. AUVSI projects that the expansion of UAS technology will create more than 100,000 jobs and 

generate more than 82 billion in economic activity in the first decade following integration. After witnessing the growth of the industry over the last few years and now with the small UAS rule in 

effect, I am confident those numbers will go even higher. 

In addition to the implementation of the small rule, Congress 

passed, and the president signed, an FAA extension which will advance UAS research, expand commercial operations, and enhance 

the safety of the airspace for all aircraft, manned and unmanned. 

While this measure will provide some short-term stability through 

September 27th, it is critical that Congress pass a long-term bill 

next year that will set the industry and the country on a glide path 

to reap all of the benefits of UAS. The extension is a good start but 

there is still a lot of work to be done. 

Government and industry collaboration is critical for keeping up 

with the pace of our industry’s innovations. Key stakeholders in the 

industry and government have successfully fostered a working relationship that has led to a more flexible and nimble approach to regulating UAS. At the same time, small businesses have led the 

charge in adopting the technology. We are hopeful that the sustained efforts of all parties will help pave the way for a true, holistic plan for full UAS integration that includes beyond line of sight 

operations, flights over people, access to higher altitudes, and platforms above 55 pounds. 

I look forward to the opportunity to answer your questions, and 

thank you for the opportunity. 

Chairman HARDY. Thank you, Mr. Wynne. 

Mr. Daniels? 

STATEMENT OF JONATHAN H. DANIELS 

Mr. DANIELS. Good morning, Chairman Hardy, Ranking Member Adams, and members of the Committee. Thank you for hosting 

this hearing and for your invitation to provide testimony. 

My name is Jonathan Daniels, and I am honored to be here 

today. I am the cofounder and CEO of Praxis Aerospace Concepts 

International, a service-disabled, veteran-owned small business 

headquartered in Henderson, Nevada. 

I cofounded PACI in 2011 with four amazing female veterans, all 

of whom had experience in aviation and operations, unmanned systems, and military intelligence. We had known each other for years 

and maintained our connection throughout multiple organizational 

changes and combat deployments. We decided to take the same 

skillsets and experience that we had used in the military and create a company that would be at the leading edge of very disruptive 

commercial technology: robotics. 

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We are best known for our activities involving civil unmanned 

aircraft systems, which has included flight as public aircraft, under 

Section 333 and within Part 107, as well as our work with several 

FAA UAS test sites and industry standards organizations. Praxis 

Aerospace was a proud participant in NASA’s UAS Traffic Management demonstration of 22 simultaneous test flights at seven different locations conducted in April 2016. Praxis Aerospace is a 

proud partner with the Clark County Fire Department and currently assists the department in managing its Public Safety Blanket COA. We work cooperatively with the City of Boulder City, 

home to the Eldorado Droneport, the world’s first public airport 

dedicated to UAS, and we are currently building a prototype cargo 

small UAS in our Nevada facilities as part of a collaborative effort 

between Local Motors, Inc. and a little company known as Airbus. 

First, I want to say that I have a great relationship with the 

FAA that dates back a decade to the early days of the Unmanned 

Aircraft Program Office. I am very thankful and appreciative for 

the work that they do. After spending years attempting to coordinate flights within European airspace, in and outside of the European Union, I find the FAA to be responsive, accommodating, and 

very open-minded. 

As an industry, we hoped for a regulatory structure for UAS that 

would be affordable for users and safe for communities on the 

ground and in the sky. Many of our peers and competitors have 

publicly derided the FAA for their perceived inertia and misunderstandings. I did not then, and do not now, share their views. I am 

grateful for the crawl-walk-run process and its preservation of the 

safety of the national airspace system. 

The FAA release of Part 107 effectively opened the skies and 

lowered barriers for entry of civil UAS. The rules brought clarity 

to an industry described by many as ‘‘the Wild West.’’ 

One of the changes out of the Notice of Proposed Rulemaking 

was the removal of military competency. We have found that the 

statement by the FAA that says that there was no consistent 

standard even though there were various different training methods throughout the Armed Services was correct but not complete. 

In 2009, the Chairmen of the Joint Chiefs of Staff issued Instruction 3255 for Joint Unmanned Minimum Training Standards which 

provided that consistent standard. We feel by leaving that military 

competency we have disadvantaged the more than 3,000 enlisted 

unmanned aircraft pilots who are trained by the Army and Marine 

Corps and thus allowing them not to immediately enter the field. 

Looking at safety and equipment, one of the challenges we have 

continuing forward relates down to repairmen. The focus has been 

on pilots, and Part 107 very heavily has knowledge and questions 

about the piloting and not necessarily maintenance. There is a vast 

difference between a 40-year experienced AMA pilot who has built 

and developed the aircraft themselves to someone who took a $150 

test and bought a $200 airframe at a local big box store. We found 

as we look at continuously operations and expanding the operations 

to beyond visual line of sight, operations over people, at night, and 

altitude, will have to have a higher level and standard to continue 

their worthiness. 

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The approval and implementation of Part 107 was definitely a 

watershed moment for UAS within the United States, and the new 

rules provide a substantial foundation for small businesses to use 

as an entry point into the multi-million dollar UAS industry. Part 

107 should be viewed as an outstanding success. 

We look forward to another 10 years of collaboration with the 

FAA. As with any new technology, there are growing pains for all 

stakeholders and we, at PACI, are patient enough to accept that. 

We are appreciative of the FAA for not conceding the safety of our 

National Airspace System to the pressure of large corporations and 

their lobbyists. 

Thank you, and I look forward to your questions. 

Chairman HARDY. Thank you, Mr. Daniels. 

Ms. Ellman? 

STATEMENT OF LISA ELLMAN 

Ms. ELLMAN. Chairman Hardy, Ranking Member Adams, and 

members of your Committee, thank you so much for inviting me 

here today. 

I am here today with a unique understanding of UAS integration 

as I have worked on these issues from both the private sector 

side—I now lead the UAS practice group at Hogan Lovells—as well 

as lead the Commercial Drone Alliance, as well as the Federal Government side. I worked on innovation issues at the White House 

and previously ran UAS policy development at DOJ. 

We are at an exciting time for innovation. Previously considered 

toys, UAS have emerged as essential tools for industry. They make 

tasks from disaster response to farming to infrastructure inspection 

safer and more efficient, enhancing American productivity. 

But as is often the case, technology moves more quickly than policymaking, and we all understand that, and drones are no different. And to really ensure the success of this industry and to balance that with a consideration for the public good, we need rules 

that enable innovation while maintaining safety and privacy and 

security. 

With the proper regulatory framework in place, the economic 

benefits the drone market will provide are significant. A recent 

PricewaterhouseCoopers report estimates the global market value 

of UAS-powered solutions at over $127 billion. That is significant. 

And just here in our country it has been estimated that the domestic drone industry will create more than 100,000 new jobs over the 

next decade. And the FAA recently estimated that by 2020, just 4 

years from now, there will have been 11 million commercial drones 

sold in our country. 

Now, it is important to note the critical role that small businesses have played in the growth of the UAS industry. Small business itself is the engine driving commercial UAS adoption here in 

the United States. And UAS are also helping resource-constrained 

small business and other industries. They make dangerous tasks 

safer and expensive tasks cheaper. Now local news broadcasters 

who cannot otherwise afford helicopters, for example, can now inexpensively obtain aerial footage for major news events, and farmers 

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ucts healthier for all of us and more profitable for them, lowering 

the cost for the consumer. 

For all of these reasons, the broad integration of commercial 

drones into the national airspace is an exciting opportunity, and 

this summer, as you have heard about, the U.S. took some critical 

steps forward. At the end of August, Part 107 went into effect and 

businesses are now, for the first time ever, broadly authorized to 

fly small drones in the United States for commercial purposes. And 

the floodgates are now open. Since the end of August, a few weeks 

ago, almost 7,000 remote pilot certificate exams were taken, and almost 15,000 applications have been submitted. 

Other executive branch agencies have been engaged as well. The 

White House recently held a first of its kind workshop on commercial UAS where commitments were made to move the industry forward. Industry and nonprofits recently agreed on a set of privacy 

best practices as part of a process facilitated by the National Telecommunications and Information Administration at the Department of Commerce, and NASA has focused on moving its unmanned traffic management efforts forward designing ‘‘highways in 

the sky.’’ But challenges and government-imposed roadblocks to 

this industry remain, and Congress can play an important role in 

clearing these roadblocks, whether through next year’s FAA reauthorization process or by other means. 

A few things are critical to small businesses if we expect to keep 

America competitive in the global UAS industry. First, the waiver 

process. We have talked a bit about the process for obtaining waivers under this new rule to fly beyond visual line of sight, over people, or at night. It must be streamlined and timely. The Part 107 

waiver itself, the substance of the relief that is granted, must also 

provide the actual ability for companies to be able to fly drones in 

the real world for their intended purpose. And we need additional 

rulemakings that broadly authorize safe flights above people beyond visual line of sight and at night, and we need to see these 

rules develop quickly. We also need enhanced government and industry collaboration. The recently convened DAC, Drone Aviation 

Committee, was a good step forward, but policymakers and 

innovators must work more closely together at the working level 

especially. We call this ‘‘polivation.’’ And we must support a whole 

of government approach that enables the broader infrastructure for 

this industry to succeed. This includes support for NASA, FCC, and 

others whose work is critical to the success of this industry. 

And finally, Congress must continue to support Small Business 

Administration programs that assist women and minority-owned 

small businesses. Two colleagues and I recently founded the 

Women of Commercial Drones Organization to bring gender diversity to the growing drones industry and continued support for programs like these SBA programs is critical. 

If we do this right, the opportunities for our country will be 

great. We have made excellent progress in recent months and it is 

important that we continue that momentum. And the industry 

needs to do its part as well. But if we all tackle these issues properly together, we will soon regard commercial drones as we do the 

phones that we carry and rely on every day. Tools that make us 

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more efficient, more productive, safer, and more connected. I look 

forward to that day. Thank you. 

Chairman HARDY. Thank you, Ms. Ellman. 

The Committee will now have 5 minutes each to ask their questions, and I will begin with myself. This is for all the witnesses 

here today. 

Has the FAA’s final rule struck the right balance between ensuring safe operations and allowing this growing industry and its participants to operate and innovate properly? We will start with you, 

Ms. Ellman, on the left. 

Ms. ELLMAN. Sure. Well, I think it is a great first start. Of 

course, it authorizes very low risk operations. So vehicles under 55 

pounds, flights within visual line of sight, away from populated 

areas or not over people during daytime hours, and it was a critical 

first start to broadly authorize very low risk operations here in the 

national airspace. And as we have seen, the floodgates have truly 

opened and let’s just say it is a huge improvement over the Section 

333 exemption process which was having to ask permission every 

time a company wanted to be able to fly. That process was burdensome. Some applications remained in the queue for over a year. 

Some never even got relief. And so it is great that we now have 

this rule that broadly authorizes commercial operations. And it is 

an excellent first step and the FAA did a great job in that realm. 

But to be honest, I think it remains to be seen whether it struck 

the right balance because I think that the waiver process that was 

baked into the rule is a critical part of it in order to enable real 

world operations. And I work with several companies who have applied for waivers, who have received waivers, who are getting waivers. But frankly, the process needs to be streamlined and friendly 

to consumers. It cannot be a replication of the Section 333 exemption process. It needs to move at the speed of industry. 

And second of all, the substance of what is actually the relief 

that companies are actually getting needs to allow for real world 

operations that are safe. And the FAA needs to actually incentivize 

safety mitigations and innovations that make drone flights safer. 

For example, putting padding on your drone or propeller guards for 

drones, or parachutes. Hardware and software that is out there 

that can actually make drones safer, we need to incentivize rather 

than merely looking in terms of risk analysis, merely looking at 

one factor such as kinetic energy, which is, of course, important, 

but just one aspect of the risk analysis. 

So I think that the FAA has done—this has moved forward. It 

is excellent news, but I think we have a lot more work to do. 

Chairman HARDY. Thank you, Mr. Daniels. Do you care to comment? 

Mr. DANIELS. I do. By delineating the difference between Part 

101 hobbyists and Part 107 remote pilots, I think we very much 

have a simple structure. It is obviously based on a century’s worth 

of aviation knowledge and best practice. 

We learned a lot of things about that and that was codified within those rules. Part 107 established the basic operational restrictions that we have in Part 103, which has been very successful for 

ultralight aircraft. In fact, Part 107 is in some ways more permissive because with the written test you are now allowed to do comSBREP-219A with DISTILLER

12 

mercial operations which you cannot do with ultralights. But it is 

a very similar restriction as far as airspace and operations and 

whether you can go over people or not. 

The side piece of that is we talked about the safety aspect. I 

briefly mentioned the ‘‘Wild West’’ concept and our desire for a regulatory structure that would allow that use without being burdensome and onerous. We have got that in Part 107. I think it is very 

easy to use and it does provide some level of safety, but I think we 

need some definite clear enforcement on the grounds of the black 

market UAS service providers. We have a problem with misfeasance and malfeasance. We have people who are providing their 

own, you know, they are providing services that would normally be 

legal except for maybe they registered an aircraft recreationally 

and not commercially, and they just do not understand what they 

are doing, right or wrong. 

The other part is that we have the malfeasance, the ones who 

know what the regulations are supposed to be, they know what 

they are supposed to do, and they choose not to do that. They do 

not get their license, they do not register their airframes, they do 

not provide the insurance, and I think that is a little bit of a safety 

risk, and I think that is part of that challenge that we are looking 

for on this balance of how successful is Part 107 going to be. We 

need to look at that. You can search YouTube right now and find 

some promotional videos by giant companies that are clearly in violation of Part 107 and it just trickles down from there. 

Chairman HARDY. Mr. Wynne? 

Mr. WYNNE. I like the balance, Mr. Chairman. The rule itself 

is very conservative. The flying that is permitted is very, very low 

risk, but the waiver process, we are just at the very beginning of 

that. The waiver process allows for us to make safety cases for 

more complex operations and the mitigations that are required to 

do that. So I think that is going to generate data, and data is really, really important in the safety arena, of course. So I think it is 

a good balance. 

Chairman HARDY. Mr. Dobbs, anything else to add? 

Mr. DOBBS. Yeah. I think that you have seen just in the first 

month of the rule with the number of applications made for remote 

pilot certificates exceeding those made in the previous year and a 

half of Section 333 exemptions, so you see this is a much more 

workable process while still ensuring safety in operations. It does 

remain to be seen how well the waiver process works. So we are 

looking forward to seeing how the data pans out over the next few 

months. 

Chairman HARDY. Thank you. My time is expired. One question 

and my time expired. 

I will turn the time over to Ms. Adams. 

Ms. ADAMS. Thank you, Mr. Chair. 

Ms. Ellman, you mentioned the need for Congress to continue its 

support of SBA programs that assist women and minority-owned 

business firms. Is there anything that we can do to improve inclusion and diversity, not only in the drone industry but the business 

community at large? 

Ms. ELLMAN. Ranking Member Adams, thank you so much for 

that question. Absolutely. 

SBREP-219A with DISTILLER

13 

As we have talked about today, the commercial drone development and sales are on the rise, but unfortunately, the number of 

women in leadership positions, whether in the drone industry or 

more generally in technology is not. 

Diversity is an important issue, not only for our own industry 

but also for the business community generally. Of this year’s Fortune 500 list, women held only 4.2 percent of CEO positions in 

America’s 500 largest companies, and aviation in particular, some 

numbers I saw from the last few years suggested that women pilots 

represented somewhere around 6 percent of the total pilot population. 

Diversity of critical not only for the individuals who are seeking 

employment, but it also helps businesses to succeed in all industries, including the commercial drone industry, will benefit once we 

have more women and minorities in leadership positions. It is 

healthy and beneficial for any organization to hear different viewpoints at the top. 

So my own view is that long-term effort must start at the elementary school and middle school level. STEM efforts need to focus 

on programs getting young girls interested in these subjects, and 

as increasing numbers of women go down the path of engineering 

and technology, it is the job of our country’s leaders all working together to work with industry and with all of us to foster and to develop this growth. 

We can help establish formal mentorship programs for women to 

help navigate technology and engineering careers, and we can continue to support minority-owned small businesses as we are today. 

Ms. ADAMS. Thank you. The commercial drones organization 

that you have cofounded, can you speak a little bit about that? 

Ms. ELLMAN. Sure. So a few amazing colleagues and I recently 

founded the Women of Commercial Drones. We participated in 

many of the drone shows, and we looked around frankly and we realized just how male dominated the field is. Of course, this is typical in Silicon Valley. And so recognizing this, we founded this 

Women of Commercial Drones organization. The purpose of this organization is really to encourage and mentor women and young 

girls at an early age to become a part of this new and growing 

drone industry and help women to succeed and grow as leaders in 

this industry. 

The great news is that we have been contacted by literally hundreds of women who want to get involved, and we hope to really 

be able to encourage women to be bold in pursuit of their careers 

in this market. Our industry will be better off once we are more 

diverse. 

Ms. ADAMS. Thank you. UAS operations are relatively new, 

meaning few aviation insurance carriers offer coverage or have only 

begun recently to do so. One study found that two-thirds of businesses operate without commercial liability. So Ms. Ellman, do you 

think that the clarity that the new rules bring to the industry will 

improve the availability of insurance? 

Ms. ELLMAN. I do. Absolutely. Insurers have been in an interesting spot, right, because they are essentially policymakers in addition to UAS users. They have also suffered from regulatory uncertainty in that they have not understood how to assign and value 

SBREP-219A with DISTILLER

14 

risk. They have all been guessing essentially. But now that we 

have the rule in place and they have some guidance on what is authorized and what we can expect, I definitely expect to see more 

insurers entering this market. And I do think that we will see more 

businesses adopting drone insurance. Just as good business practice, I am seeing more and more customers and end-users requiring 

it. 

As well, FAA resources are limited and regulators do not have 

the time or energy to go after every illegal flight that happens. We 

have heard about this from others. Civil liability in case of an accident is what they are going to worry about, and for many of these 

small companies, one accident can mean their whole business is at 

stake. So yes, I do think we will see more availability, and as a result, more companies get insurance. 

Ms. ADAMS. Thank you. 

Mr. Wynne, your association predicted similar growth if FAA developed favorable drone regulations. So do you believe the final 

rule goes far enough to allow for this kind of job growth? 

Mr. WYNNE. Not this rule, no. But the good news is there are 

additional rules that are in process and the waiver process itself 

will, I think, allow for us to extend value. But I think there is a 

tremendous amount of value that gets unlocked under these rules 

for inspection of vertical infrastructure for flying over farming and 

things like that. There is just a very long list of things that can 

be done under Part 107. 

Additionally, we need, you know, the broadcasters have been 

mentioned. There are others that need the ability to fly over people. That rulemaking has already gotten started and the good news 

is that we have pathfinder programs that have been underway sort 

of point at where we need to be in order to prove the safety cases 

for beyond visual line of sight operations, et cetera. There are also 

very large platforms that will also be allowed to fly ultimately, and 

in some instances, that rule making is easier because when you get 

into the flight levels above 18,000 feet, we do not like deviation. So 

it will be more predictable. 

Ms. ADAMS. Thank you, sir. I am out of time. 

Mr. Chair, I yield back. 

Chairman HARDY. Thank you, Ms. Adams. 

I would like to turn the time now over to the chairman over Contracting and the Workforce, Mr. Hanna. 

Mr. HANNA. Aviation does not love you sometimes, too; right? 

It is a two-way street. 

I am a pilot, and I have Griffiss Air Force Base, which you know 

is one of the six. And I think it is a great opportunity. I mean, you 

have all laid that out quite well. I am a little surprised, Mr. Daniels, for everyone to be so positive about the FAA because frankly, 

most people are not. And the idea that they originally thought you 

had to have a pilot’s license for this or that Japan has had these 

larger, much larger for agriculture and other purposes, for 20 

years, we are way behind the eight-ball. And a lot of it is our inability to deal with regulation in a timely fashion and an emphasis 

on safety is appropriate, but frankly, not always practical. 

The line of sight issue, the night issue, the fact that I can own 

10,000 acres and I cannot go over 400 feet and I have to see this 

SBREP-219A with DISTILLER

15 

thing is silly on its face, and I will be blunt. So I want to talk about 

something. 

Like agriculture, it is just a tremendous opportunity. One of the 

largest hazards to pilots today are ag crop people, people who fly 

and spray have one of the highest illness rates of any profession, 

and yet we have this opportunity to have larger drones over big 

areas and isolate the amount that we spray and limit the amount. 

You know all this. 

So I want to ask you, because I have watched the FAA. I have 

been here 6 years, and I have watched this process move I think 

for some things at a snail’s pace. One of them is the idea of agriculture. So line of sight makes not a lot of sense to me, and I understand that over populated areas. But line of sight and elevation 

of 400 feet for, you know, that may be an appropriate elevation. I 

would like to give anyone who wants to talk about it an opportunity to either agree with me or disagree with me or see what you 

would like to see differently, because I think that is something that 

someone could do that is elementary and could be done very quickly and without a lot of problem. 

Mr. Dobbs? 

Mr. DOBBS. Thank you. Yes. We actually agree with you. We 

are very happy that Part 107 is finally in effect and it really 

opened things up for the industry, but there is still a lot of work 

to be done. There are technological solutions to flying beyond line 

of sight. On the drone that I brought in today, there is technology 

for sense and avoid that allows drones to avoid obstacles that are 

unexpected. There is also technology, including geofencing, which 

keeps the drone on a particular parcel of property below a particular elevation. So there are all these kind of technological solutions to ensure safety in operations. And we have also seen overseas risk-based regulation where we do not treat a 2-ounce drone 

the same way we treat a 50-pound gas-powered drone. And we 

would like to see in future rulemakings that are now under consideration micro UAS classification and looking at both the weight of 

a drone and the operational—— 

Mr. HANNA. My son owns about 20 of those. 

Mr. DOBBS. That is right. Yeah. And they—— 

Mr. HANNA. There is no permanence there. 

Mr. DOBBS. They do not pose real risk. Obviously, smaller 

drones in more remote areas pose a very different risk than a larger drone flying over a crowd of people at a sporting event or something like that. 

Mr. HANNA. My point is that, I mean, the FAA in an effort to 

be safe, and I get that and everybody does, and that is their job, 

but it should not mean that they drag the process out in a way that 

guarantees that they never have a problem that comes back to 

them. 

Mr. DOBBS. And we agree. And we are very hopeful that with 

the FAA reauthorization next year that Congress will help push for 

some new rules and that simultaneously, the FAA will be going 

through the rulemaking at a little bit of a quicker pace. 

Mr. HANNA. But the permit process for agriculture ought to be 

much different than the rest of it and it is not, the exemption. So, 

I mean, you ought to be able to—— 

SBREP-219A with DISTILLER

16 

Mr. DOBBS. Yeah. We absolutely agree. So Part 107 does allow 

for operations over less populated areas more easily than it does 

near airports and in large cities. But there is not that risk-based 

classification system yet that differentiates between drones of different sizes and in remote areas versus more populated areas. 

Mr. HANNA. Thank you. My time has expired. 

Chairman HARDY. Thank you, Mr. Hanna. 

I would like to turn the time over to the ranking member on 

Small Business, Ms. Vela ́zquez. 

Ms. VELA ́ ZQUEZ. Thank you, Mr. Chairman. 

Mr. Dobbs, some countries have already solved some of the airspace integration problems that the FAA is addressing in these 

rules. Do the new regulations allow us to solve these issues at the 

same pace as other countries? 

Mr. DOBBS. Thank you for the question. The new rule, Part 107, 

is a great step forward and has opened the skies for some use 

cases, but there are still many, including operations at night, beyond line of sight, operations over people, that are restricted under 

the new rule. So there is still work to be done and we are hopeful 

that new rulemakings will help solve this along with perhaps some 

new rules as part of the FAA reauthorization next year. 

Overseas, we do see risk-based systems that take into account 

where the drone is operating, what the use case is, and what the 

size and weight of the drone is that better address these safety 

questions. 

Ms. VELA ́ ZQUEZ. And are those steps that those countries are 

taking in terms of addressing the issue of integration, would you 

think that these are the type of steps that you would like to see 

happen here? 

Mr. DOBBS. Absolutely. We see in many European countries, 

and Australia and Canada, there are weight-based classifications 

for drones, so drones under about 4-1/2 pounds, which our new 

drone is built to be under that weight, are treated differently than 

larger drones, and there are different weight classifications and different safety standards for things like beyond line of sight flights. 

So we would like to see those come to the United States as well. 

Ms. VELA ́ ZQUEZ. Thank you. 

Ms. Ellman, you noted in your testimony that with the new regulatory certainty, additional funding dollars will be flowing into the 

industry. Has the industry suffered from a lack of access to capital? 

Ms. ELLMAN. Yes. Thank you for this question. 

Over the past several years, investors have started to invest 

more money into the drone market, but in the first quarter of this 

year we did see corporate activity dipped, but because in addition 

to the murkiness of the regulatory environment, investors were 

also concerned with public perception and privacy issues. This is 

something that our industry is confronting, and it is very important that we do. But with Part 107, investor skepticism has really 

declined and funders are looking to aggressively fund more companies in the drone market and this is a great thing. And with this 

increased regulatory certainty, it was a huge step forward, investors understand the market is really going to grow, and quickly, 

and they are also more knowledgeable about the industry as a 

whole. And so they can make smart decisions. So I do expect we 

SBREP-219A with DISTILLER

17 

will see more mergers and acquisitions and investors in money 

flowing into the industry helping many of these small businesses 

that have thus far suffered as a lack of result of the regulatory certainty, but funders will understand that now is really the time to 

get in. 

Ms. VELA ́ ZQUEZ. If there is anything that you think that Congress can do to spur investment into the industry. 

Ms. ELLMAN. Yeah. Absolutely. I mean, I think a lot of what 

we have talked about here, because so much of the investment 

money held back because of regulatory and policy issues is really 

supporting this whole of government approach to integration, providing funding, providing regulatory oversight so we can make sure 

we are meeting our deadlines and quickly, enabling the broader infrastructure for this industry to succeed. So we have talked about 

the NASA, UTM—unmanned traffic management—efforts, designing highways in the sky. The FCC spectrum issues is another example. They are critical where we need to consider. In order to be 

able to have beyond visual line of sight flights and cargo flights, 

we need this infrastructure. 

So Congress can also support state and various state efforts that 

promote commercial drone innovation and growth, and use your 

funding, oversight, and bully pulpit functions. This hearing is a 

great example to ask all relevant agencies to engage with the industry now with a focus on finding solutions that can enable commercial UAS integration safely and broadly and in an expeditious 

way. 

Ms. VELA ́ ZQUEZ. Thank you, Mr. Chairman. I yield back. 

Chairman HARDY. Thank you. I turn the time over to Mr. Davidson. 

Mr. DAVIDSON. Thank you, Mr. Chairman. Thank you all for 

coming here and talking about an important and emerging market 

in the United States and around the world. I appreciate your perspectives, and I want to ask a little bit more about some of the testimony. 

So Mr. Wynne, in your testimony you describe a new regulatory 

framework as a flexible, risk-based approach to regulating UAS. 

For those of us who are not familiar with how the FAA currently 

crafts its regulations, what is different about how the FAA is regulating unmanned aircraft? 

Mr. WYNNE. That is a great question. Like Congressman Hardy, 

I, too, am a pilot, and there are probably others in the room. And 

the FAA is very control-oriented when it comes down to the smallest parts that go into an aircraft. And when you are flying, and we 

all fly, that is important. 

With unmanned aircraft, that certification process, for example, 

will become very burdensome. This technology iterates very, very 

quickly, and in fact, we are advancing the technology and making 

it safer all the time. So when we say risk-based and flexible, what 

we are actually doing is creating an environment that allows for 

the safety to continue to improve at the speed of technology rather 

than constraining it by a regulatory process. 

Mr. DAVIDSON. Thank you. 

SBREP-219A with DISTILLER

18 

Ms. Ellman, from your perspective, what are the most pressing 

safety, privacy, and security issues that must be addressed in the 

regulatory environment that you referenced? 

Ms. ELLMAN. Well, I think we are well on our way. In terms 

of safety issues, of course, what the federal government really cares 

about is—what the FAA really cares about on safety issues is, is 

a drone going to fall out of the sky or fly away at any time? And 

the key is that there is innovation and new technologies that make 

drones a whole lot safer, and the new regulations should really incorporate these new technologies as it is considering its additional 

rulemakings on, for example, beyond visual line of sight flight, 

night flights, that kind of thing. 

Security issues, of course, there is a lot of talk about counter 

UAV technologies. As drones become more ubiquitous, people are 

worried about is a drone flying over my backyard? Companies are 

worried about whether drones are flying in their vicinity. Prisons, 

we have heard a lot about this. And so, of course, that is another 

area where actually the policy has very much lagged behind the 

technology. We have technology that can detect, identify, and track 

unwanted or unauthorized drones, but the question is what can 

you do with it? And it is unclear at a policy and legal level as well. 

And, of course, the privacy issues, this is what the American 

public is most focused on. Are the privacy issues about is a drone 

spying on me in my backyard? There are a whole long list of privacy laws and rules that are technology neutral that do protect us 

already. But, you know, the White House released a presidential 

memorandum on UAS privacy issues, and as part of that required 

the NTIA (National Telecommunications and Information Administration) at the Department of Commerce, to convene a group of industry and stakeholders, as well as privacy advocates. And just 

this May we all came to consensus around a set of best practices 

around privacy, transparency, and accountability related to the private and commercial use of UAS. And so with that in place, our 

next task is simply to educate the UAS community, educate the 

public. There are laws and rules in place that already protect them, 

and we do not necessarily need duplicative efforts. 

Mr. DAVIDSON. Thank you. 

Mr. Dobbs, could you highlight some of the safety features that 

are designed, common practice now and what sort of gaps are out 

there in the R&D world? 

Mr. DOBBS. Absolutely. Thank you for the question. 

So first of all, it is pretty common practice to have geofencing 

whenever you fly a drone. And that makes sure that your drone 

stays in the area, both vertically and horizontally, that you intend 

to operate in. So that is a critical piece to make sure that drones 

are not operating in too congested airspace. 

The next generation of technology includes sense and avoid. So 

that is something that Kespry has built into our drone. We use a 

laser to scan for potential obstacles, which is critical for unexpected 

trees or structures or even other drones operating in more congested airspace. In the future, we have been working with NASA 

on UTM. NASA has led this effort on unmanned traffic management in creating this highway in the sky so that drones can talk 

to each other, and for full integration into the airspace, actually 

SBREP-219A with DISTILLER

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talk to other manned aircraft. So those are some of the critical 

technology developments that are being worked on now. 

Mr. DAVIDSON. Thank you. 

And Mr. Daniels, similar question. What kind of things are opportunities or threats to your business as you develop? 

Mr. DANIELS. Well, I think that is part of the challenge is that 

when we talk about expanding out into agriculture and beyond visual line of sight and that technology, you have a lot of export compliance and ITAR regulations that limit that as well, agriculture 

being one of them. Even though we have recently opened up to 

nonmilitary unmanned aircraft as a special categorization, that becomes an additional part of the challenge. And those are things the 

FAA has no control over and cannot mandate. So I think part of 

that is as we expand that technology, we find those gaps, either we 

cannot apply the military technology we do have or we have to create new ones outside that. 

Mr. DAVIDSON. Thank you. 

Mr. Chairman, I yield back my time. 

Chairman HARDY. Thank you. 

We still have some time and I would like to ask a number of 

questions, so we will go through one more time. 

I would like to begin with Mr. Daniels. In your testimony, you 

indicated that the FAA’s regulatory framework should take into account veterans with unmanned air systems training and make it 

easier for them to obtain an unmanned aircraft operator certificate 

with small UAS rating. Can you explain why this is important and 

how the rule’s initial testing requirement would deter veterans 

with relevant UAS training and experience from not applying for 

remote pilot certificates? 

Mr. DANIELS. Yes, Mr. Chairman. 

So as it sits right now, the military has been using unmanned 

aircraft for 70-plus years; right? JFK, his older brother was killed 

in an unmanned aircraft accident. We kind of forget that sometimes. We think this is a new industry. In the last 20 years, the 

majority of experience people have with operations over people, beyond visual line of sight, flying at night, flying at these upper altitudes, has been done by the military. Much like we do with military manned pilots, we have a military competency test that the 

FAA gives, and then you have to prove you have the knowledge, 

but you do not have to go through the exact same application process that you do as if you are starting out as a civilian pilot. They 

take recognition of that timeframe, that recognition, that experience. 

I think especially starting with the remote pilot certificate with 

the smalls, again, the majority of the people who fly small unmanned aircraft systems within the United States, it still is the 

military. The military does 1.1 billion hours of small unmanned 

aircraft flight a year, and they are enlisted, nonrated pilots who do 

not have pilot licenses and have to go through the normal process. 

As we go to the larger systems, beyond 55 pounds, again, we 

have thousands of military pilots who are there. If we want to grab 

that experience and get that into the workforce, again, taking a 

disadvantaged community, that being veterans, this is the way we 

have to go forward. 

SBREP-219A with DISTILLER

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Chairman HARDY. Thank you. 

Mr. Wynne, have you obtained a remote pilot certificate with the 

small UAS rating under this new rule? And if so, did the process 

go smoothly? 

Mr. WYNNE. Yes, sir, I have. The process was smooth. I am a 

Part 61 certificated pilot, so I went through that process and have 

recently been looking at what is on the knowledge-based test, and 

I think it is consistent with the kinds of skills that we would want 

all airmen to have. And the good news about the way they have 

rolled this rule out is that the concept in aviation of pilot in command is ‘‘I am responsible for the safe conduct of my flight.’’ We 

have added remote in front of that. So, but they have done away 

with things that are not required for pilots of manned aircraft, and 

I think that is the right way to go. And by the way, I completely 

support what Mr. Daniels is saying about military pilots. We have 

a tremendous reservoir of talent out there that the United States 

taxpayer has paid for that is waiting to go to work for us and large 

industries that want to take advantage of that, and we should 

make this technology and these job opportunities as accessible to 

our veterans as they are for the rest of us pilots. 

Chairman HARDY. Thank you. 

I would like to go back to Mr. Daniels. In your testimony, you 

note that Praxis Aerospace has been involved in the development 

of the Eldorado Droneport. Can you explain what a droneport is 

and how you envision them operating in the future? 

Mr. DANIELS. Thank you again. 

So the Eldorado Droneport is a public development by the City 

of Boulder City. It is 50 acres of land surrounded by 100 acres or 

100 square miles rather of city-owned land. It is actually working 

in concert with the Oneida County and Griffiss International Test 

Site. And the intent there is as we talk about going from nonscheduled flights to scheduled flights, right now the majority of unmanned aircraft flights are relatively impromptu and intermittent. 

We go out and we fly from a location, conduct a surveillance, conduct a survey, conduct an agricultural mission, whatever it is that 

we are doing, and then we leave and never fly there again. As we 

start getting larger systems, as we start getting to more scheduled 

flights, like delivery and cargo, you are going to want to have a location where that is done and where that is carefully scoped out 

for safety concerns—the lighting, the building codes around there. 

Additionally, we want to be able to expand that out. We do that 

with helipads now. So if you think of a helicopter that can land 

anywhere, there is a reason why we have helipads. Nobody wants 

Amazon drones coming in to do a delivery, a bunch of kids to come 

running out in the landing area. We need to figure out how to put 

that in place. What we are trying to do with the droneport is have 

a site to do that, again, tied in with the test sites as they are right 

now and then continuing to build forward so that as we go forward 

in the future, just like we did with Internet cafe ́s where that was 

the place where you got your Internet and now we all have it on 

our cell phones, well, this will be the place where you learn how 

to take off and land from a droneport, and eventually it will be everywhere and you will not need a dedicated drone port for that. 

Chairman HARDY. Thank you. And I am out of time again. 

SBREP-219A with DISTILLER

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Ms. Adams? 

Ms. ADAMS. Thank you, Mr. Chair. 

Mr. Daniels, one survey conducted showed that many companies 

are unclear of the current FAA regulations, yet they continue to operate commercial drones anyway. The arbitrary decision to follow 

rules is troublesome as it could present a risk to the public safety. 

What can be done to avert a recurrence of this behavior and increase the level of public adherence to the regulations? 

Mr. DANIELS. Ma’am, that is a very good question and one that 

I have literally spent sleepless nights over looking at. The idea of 

arbitrary rule following, again, that is a misfeasance/malfeasance. 

Right? Some people do it by accident. Some people do it deliberately. But it damages the industry as a whole. And it is coming. 

When there is that thing that happens that draws the attention, 

no one is going to look at whether they were doing the right thing 

or not. No one is going to look at whether they are actually following the rules. They are going to look at it as an industry-wide 

failure. 

One of the things I say behind that is bring in the veterans because we have a lot of experience here. Another thing I talk about 

is repairmen. The whole focus for Part 107 is on remote pilot, not 

on the repairmen, not on the continued airworthiness. For us to do 

the missions that Mr. Dobbs, Mr. Wynne talk about, we are going 

to need people to keep those aircraft in the sky, much like we need 

mechanics working on our cars right now. We need to add that in 

there. 

And then finally, and I have joked about it before, we need a 1- 

800-BADRONE or some measure to, you know, Crime Stoppers, 

some measure to say, look, I have been at a jobsite where a guy 

flies up to go with his little phantom drone and takes off. And as 

we talked through and said, okay, do you have your certificates, 

they immediately packed everything up and ran away. But we need 

a way to self-police and maybe escalate that a little more to whether it is local law enforcement or the FAA. 

Ms. ADAMS. Thank you. 

Are we going to fly this drone today, Mr. Dobbs? 

Mr. DOBBS. It does not fly indoors. 

Ms. ADAMS. Oh, okay. Okay. 

Mr. Daniels, let me follow up and ask you about the proposed 

rule that sought comments on whether there should be an inclusion 

of a micro drone category. Ultimately, a micro drone category was 

not included in the final rule, so how large of a role can we expect 

micro drones to play as commercial drone uses expand? 

Mr. DANIELS. Ma’am, that is another good question, and I had 

the opportunity to address the micro UAS ARC about this. 

My challenge with the micro drones is that at a certain point, 

until the technology gets there, we do not have the ability to integrate the things that we know we need for safety—the sense and 

avoid, the transponders, things that you will need to fly free and 

openly, even under Part 107 and the Part 107-type waivers. You 

just cannot get that on an airframe that weighs 500 grams or less. 

However, I see a lot of opportunity in public safety. I know that 

is one of the things that militaries use that will definitely transfer 

over where if you have a drone in your pocket as a fireman, you 

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are able to bring that to a local situation and immediately get eyes 

on. Under the rules as they exist right now it is a fantastic use for 

micro drones. It is much less expensive than not only large commercial aircraft that we have right now but also some of the larger 

drones. The second piece of that is you could put one of these 

things in a box next to your fire alarm, and when the fire alarm 

goes off the box opens up, the micro drone comes out and can actually run up and down the halls and give you immediate information to feed whoever is coming to help rescue you, whether it is the 

fire department, law enforcement, it does not matter. You have an 

immediate eyes on. I see a lot of opportunities for micro drones. 

Ms. ADAMS. Okay. 

Mr. Wynne, we talked a little bit about security and we know the 

risk that hacking plays in security, and drones are just as liable 

to this threat as other forms of technology. So how likely is it that 

a drone hacking can or will occur? 

Mr. WYNNE. Well, I think it is likely enough that we as an industry have got to take measures against it. And this is one of the 

phenomenon that we in a rapidly advancing technology industry 

face, like all technology industries. The Internet has caused all 

manner of challenges with regard to privacy and other things and 

we have anti-virus software for the Internet, so our industry, one 

of the fastest-growing elements of our industry will be counter 

drone technology, for example. 

I was at a cyber conference last week in Newport News and listening to people across the spectrum of technology talking about 

cyber challenges. It is significant. But it is no different for our industry than it is for the healthcare industry or for any other industry. So, but that is the reason I was there because we need to learn 

across those industries. 

Ms. ADAMS. Great. Thank you very much. I yield back, Mr. 

Chair. 

Chairman HARDY. Thank you all for being here. 

But I am going to take the liberty of asking one more question. 

I will begin with you, Mr. Dobbs, and anybody else who would like 

to address it can. 

As of September 20, 2016, the FAA had received 552 waiver requests under Part 107 and approved 79. However, the 79 waiver 

requests that have been approved were submitted under the Section 333 exemption before the final rule effective date. Does the 

fact that the FAA has not approved the new waiver requests submitted since Part 107 went into effect give you any concern? 

Mr. DOBBS. That is a great question. Thank you, Chairman 

Hardy. 

Absolutely. We are concerned that the waiver process will be 

similar to the Section 333 exemption process in that it will take 

quite a bit of time for these waivers to work their way through the 

system. What we saw with Section 333 is deadlines being missed, 

and there are also many use cases after a storm when you need 

to inspect homes or track progress on a construction site, it is critical that these waivers be processed quickly or we even create a 

system where these waivers are not necessary. But it is a real concern that we are watching. 

Chairman HARDY. Thank you. 

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Anybody else? 

Mr. WYNNE. I think as I understand it, what is happening now 

is that the UAS Integration Office inside of the FAA, which is exclusively devoted to this, is now pulling in resources from the entire FAA. It is easier for them to identify who is not working on 

UAS at this point than who is. But a lot of those offices are relatively new. So they made a point, Earl Lawrence, the head of that 

office made a point of explaining that when you put in a waiver 

that is not necessarily going to come into our office. It is going to 

get directed to a different office, and I think all of those people are 

trying to understand exactly what their roles are. But we have 

been emphasizing the importance of cadence, and yet we have to 

find that balance. I think like the 333 exemption process, it will accelerate over time, but will be clearer to those that are requesting 

waivers and permission to fly under certain circumstances, what 

the mitigations are they need. That will be communicated out to 

the public at large and this process will move quicker. 

Chairman HARDY. Thank you. 

Mr. DANIELS. Mr. Chairman, if I can add to that. 

The FAA is working with ASTM, an industry standards organization, specifically on addressing an alternative method of compliance for this that will help accelerate the waiver process, as well 

as form the guidelines for the operations over people, beyond visual 

line of sight. And they have been doing so for a year and a half 

that I have been personally involved and I am sure well beyond 

that. The idea again is you have an industry standard that is selfcertifying, self-compliant, and you have to meet what is within 

there, much like we do with underlying laboratories as it is now— 

provide that to the FAA, and it makes it much easier for them to 

inspect it. It follows their formats. It follows their questions. You 

have everything in line with that. And I know the delivery date for 

those is within the next 6 months. So I see that changing and 

being a much easier process, knowing for a fact that they are building a standard specifically for the waivers for Part 107 now. 

Chairman HARDY. Thank you. 

Ms. Ellman? 

Ms. ELLMAN. Yeah. So one area I would talk about is in terms 

of flights over people. One thing to watch here, I know the FAA is 

requiring a lot of quantitative analysis, ballistic gel tests, drop 

tests, and this is where, you know, in addition to kind of all this 

data that is out there, it is important that the FAA actually consider the operational and technical mitigations in addition just to 

kinetic energy, which I think a lot of folks look at what is being 

required in the flights over people context and frankly, it is going 

to be a tall—if the process is as intense as it looks offhand, it is 

not going to go in any expedited way. And as the industry evolves, 

we really want to be incentivizing safety and incorporating this innovation and incorporating parachutes and propeller guards and 

padding for vehicles and allowing those mitigations to actually get 

broader approvals. I think what we are seeing is very, very narrow 

approvals for things that even weigh about a pound or so. And so 

I think that this is critical as we move forward that this has to be 

a scalable process, something that small businesses across the 

country are going to be able to meet that are operating safely. 

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Small businesses want to operate in a way that is safe, and we 

need to be able to incorporate innovation so that we can actually 

move this process forward and provide real opportunities to use 

these devices. 

Chairman HARDY. Thank you. Thank you all for being here 

today. I appreciate your testimonies. 

As the FAA opens the skies to commercial drone activity, the 

new avenues of economic opportunity are opening for the startup 

and small business communities. The Subcommittee will monitor 

implementation of the Part 107 and how well the new regulatory 

framework is working for small companies. We will also continue 

to encourage the FAA to diligently move forward with its efforts to 

safely integrate UAS into the national airspace while addressing 

safety, privacy, and other concerns. 

I ask unanimous consent that all members have 5 legislative 

days in order to submit their statements and supporting materials 

for the record. 

Without objection, so ordered. 

This hearing is now adjourned. 

[Whereupon, at 12:10 p.m., the Subcommittee was adjourned.] 

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A P P E N D I X 

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Prepared Statement of Gabriel Dobbs 

Chairman Hardy, Ranking Member Adams, and distinguished 

members of the Subcommittee, thank you for the opportunity to 

testify today on behalf of Kespry and the Small UAV Coalition. 

This is both an exciting and critical time for the commercial unmanned aerial systems (UAS) industry and I appreciate the opportunity to discuss Part 107, particularly as it impacts small businesses like Kespry. We applaud the Subcommittee’s interest in this 

new framework as it underscores your commitment to ensure that 

the United States has a regulatory environment conducive to innovation and job creation for businesses of all sizes. 

I would also like to thank the Small UAV Coalition—the first 

group of its kind focused solely on commercial drone operations— 

for its leadership in working with policymakers and regulators to 

develop a robust, yet flexible framework that will no longer be built 

around exemptions and exceptions. Thanks to their hard work, this 

industry is now ‘‘open for business.’’ 

Like many small businesses across the country, Kespry was 

started on the floor of an apartment by a few college graduates 

passionate about the promise of drone technology and its potential 

to have meaningful impact on business in America and around the 

world. Today, we have been in business for over three years. We 

have customers operating drones in every state, generating millions in revenue. We now employ over 60 people and continue to 

grow aggressively. Kespry is a ‘‘made in America’’ business. We design and manufacture our fully integrated drone systems entirely 

in the United States. 

Kespry’s mission is to create technology that significantly advances the effectiveness, efficiency, and safety of workers in the 

real world. This can mean everything from creating a 3D model of 

hard-to-reach areas of construction, to inventory management, to 

identifying damage on structures faster to help homeowners and 

businesses get back on their feet after a major storm. 

In less than 30 minutes, for example, a Kespry drone can provide 

aerial imaging and mapping solutions for a 150-acre construction 

site that allow project managers to track progress, manage resources, and complete projects on schedule and under budget. It 

takes less than five minutes for a Kespry drone to survey a roof 

to evaluate damage and thus inform repairs and claims adjustments, eliminating the need for insurance companies to put employees and contractors at risk of physical injury by climbing ladders and walking on damaged roofs. A quarry can use a Kespry 

drone to accurately measure the volume of stockpiles in a matter 

of minutes, rather than days. We save businesses time and money, 

and give workers an invaluable tool to improve safety and automate dangerous, time-consuming jobs. 

The drone industry, particularly the commercial sector, also represents a largely untapped market that stands to add billions of 

dollars to our economy. One recent report estimated that the drone 

industry as a whole could be valued at $100 billion by 2020. The 

largest area of growth lies in the commercial segment, which is esSBREP-219A with DISTILLER

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timated to grow to a $21 billion industry within five years. This 

growth will allow American companies of all sizes, including small 

businesses, to create countless high-paying, highly-skilled jobs. 

These economic benefits will also permeate through other industries, from insurance to component manufacturers. But none of this 

is possible without Part 107 and subsequent rulemakings that open 

the skies to commercial drones while maintaining the highest safety standards. 

Early FAA UAS Regulations 

Two years ago, the drone revolution was just beginning and the 

FAA had devoted very limited resources to small UAS. Operators 

had to ask the Secretary of Transportation for permission to ignore 

certain federal regulations on the books relating to aircraft, since 

these regulations treated a small drone the same as a Boeing triple 

7. An exemption was required from the requirement to maintain a 

paper flight manual on board the aircraft. Another one of the many 

regulations we requested exemption from required us to have a 

fourteen inch registration number or ‘‘N Number’’ on the ‘‘tail’’ of 

our aircraft. Since our aircraft had no tail, we found this difficult 

to comply with. 

In late 2014, the first so-called section 333 exemptions were 

granted. The industry celebrated this milestone, but the fine print 

on the exemption grants made it clear that this was not the solution we had been waiting for. The exemptions required two persons 

for any drone flight, including one person who held a private pilot’s 

license and a visual observer. The exemption also restricted flights 

to at least 500 feet from all persons and buildings. This was commercially impractical and failed to acknowledge the advances in 

autonomous flight technology. 

The many conditions and limitations on the FAA’s exemption authority significantly limited the growth of the small UAS industry 

in this country and led many companies to conduct operations in 

other countries where regulatory advances have been made more 

quickly. For example, drones have been operating beyond the line 

of visual sight—a critical element of commercial operations—in 

France since 2012. The Japanese government is racing to implement a regulatory framework to have drone delivery in place in 

rural areas by 2018 and in urban areas in time for the 2020 Tokyo 

Olympics. Part 107, provided it is implemented to expand the nature and scope of operations, will help ensure that the United 

States does not continue to cede ground to our global competitors 

who are aggressively embracing this rapidly developing technology 

and its corresponding economic and consumer benefits. 

Part 107 Benefits Both the Commercial Drone Industry and Consumers 

Kespry worked with partners from the Small UAV Coalition to 

help the FAA create a rule that put robust safety precautions in 

place for small commercial drone operations, while eliminating 

many of the categorical restrictions in the proposed rule that would 

have been economically impractical with no material impact on 

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safety. While the rulemaking process took longer than anticipated, 

the FAA was receptive to industry input and expertise; over twothirds of the recommendations made by the Small UAV Coalition 

in response to the Notice of Proposed Rulemaking (NPRM) were incorporated into the final rule. 

The moment it went into effect on August 29, Part 107 was a 

huge improvement over the Section 333 process, a laborious and 

lengthy for both industry and the FAA. First, commercial operators 

seeking to operate small UAVs no longer need to petition for FAA 

approval if they plan to operate within the scope of the rule. Second, the FAA no longer requires UAS pilots to have manned aircraft flying experience, which has little correlation to the skills required to operate a UAS. Instead, remote pilots must pass an aeronautical knowledge test to ensure they have the capability and 

knowledge required to safely and responsibly operate a drone for 

commercial purposes. 

Operators may fly during daylight and within the visual line of 

sight in uncontrolled airspace without obtaining any additional 

FAA approvals. Operations can be conducted up to 400 feet above 

ground level, though a UAV may operate over a structure up to 400 

feet above that structure if it remains within 400 feet of that structure. These parameters allow Kespry to conduct many of our operations much more efficiently than under the Section 333 regime, 

enabling us to expand our offerings and widen our customer base. 

We hope that Part 107 will allow the FAA to devote more resources to continued development of a regulatory framework that 

will pave the way towards critical components of widespread commercial drone operations that the final rule either does not address 

or permits only under limited circumstances. 

Beyond Part 107 

While Part 107 is a solid first step towards a comprehensive regulatory framework for commercial drone operations, there are several key components that the FAA must address expeditiously or 

United States companies will lose out to foreign competitors eager 

to invest in this developing technology. 

Improving the Part 107 Waiver Process 

As urged by the Small UAV Coalition, Part 107 allows operators 

to seek a waiver from several regulatory limitations, perhaps most 

notably to operate at night, directly over people, and beyond the 

visual line of sight. These elements are critical to the successful 

and widespread integration of commercial drones into the national 

airspace that will help create tens of thousands of jobs. The FAA 

has already granted 79 waivers, the vast majority of them to allow 

operations at night. Time will tell whether the waiver process will 

be more efficient and flexible than the section 333 exemption process. We do not know whether the FAA’s staffing and resources are 

sufficient to implement the waiver process to support the need for 

expanded operations that will save money, save time, and save 

lives. 

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Operations Beyond the Visual Line of Sight and Over People 

While we appreciate that Part 107 allows for waivers to operate 

beyond the visual line of sight (BVLOS) and over people, the FAA’s 

next phase of regulations must provide for even more efficient approval of these types of operations or the United States will fail to 

develop the robust commercial drone industry that other countries 

are actively pursuing. A rancher in Nevada or a farmer in North 

Carolina cannot fully benefit from drone technology if he must follow his drone in his truck to maintain the visual line of sight while 

inspecting his property. 

France, Poland, Sweden, Norway, and the Czech Republic are 

just a few of the countries in which beyond visual line of sight operations have been taking place for years with high levels of safety. 

Technology already exists that ensures safe beyond visual line of 

sight operations and eliminates the need for operators to seek 

waivers on a case by case basis, a burdensome endeavor for both 

companies—especially small businesses—and the FAA. 

Congress has also endorsed the need for expanded beyond visual 

line of sight operations. FAA reauthorization that passed the Senate 95-3 earlier this year included language that expressed the 

sense of Congress that ‘‘beyond visual line of sight....operations of 

UAS have tremendous potential to spur economic growth and development through innovative applications of technology and to improve emergency response efforts as it relates to assessing damage 

to critical infrastructure such as roads, bridges, and utilities, including water and power, ultimately speeding response time.’’ 

Equally as critical to realizing the full potential of commercial 

drone applications is the ability to safely operate UAS over populated areas and people not directly involved in the operation of the 

UAS. The FAA has announced its intention to publish a proposed 

rule for Operations of Small Unmanned Aircraft Over People for 

public comment before the end of the year. The proposed rule is to 

be informed by an Aviation Rulemaking Committee report produced earlier this year by a task force comprised of FAA, industry 

and other aviation stakeholders. The report recommends risk-based 

performance based standards, manufacturer compliance requirements, and operational provisions that we hope to see incorporated 

into the proposed rule. We also hope that the proposed rule will 

recognize that very light weight, so-called micro UAVs pose the 

least risk and therefore can be permitted to operate over people 

under certain circumstances without compromising safety. 

Risk-Based Regulations: Micro UAS Classification 

Industry has been pleased to see the FAA taken an increasingly 

risk-based approach to UAS regulations, but it has yet to acknowledge in regulation the risk differentiation between very small UAS 

that weigh only a few pounds or less and a drone that pushes the 

55 pound limit of vehicles subject to Part 107. A micro UAS classification would create an even more efficient regulatory framework, 

further reducing the burden on small UAS operators without creating any significant safety concerns. 

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In the preamble to the proposed rule, the FAA put forth the idea 

of a micro UAS classification for vehicles weighing up to 4.4 

pounds, including payload, based on concepts put forth in other 

countries. Kespry and the Small UAV Coalition endorsed this idea, 

the basis for which was the belief by some at the FAA that a small 

UAS operation should be given more leeway where the safety risks 

of operating such a small vehicle are negligible. We were disappointed to see that despite receiving strong support for its micro 

UAS proposal, the FAA chose not to include it in the final rule. 

Congress has also endorsed the concept of micro UAS classification. FAA reauthorization bills approved earlier this year by the 

Senate and the House Transportation and Infrastructure Committee both included provisions directing the FAA to establish a 

micro UAS category. Unfortunately, this direction was stalled despite strong, bipartisan support when the effort to enact comprehensive, long-term FAA reauthorization legislation was derailed 

and a short-term extension of current FAA authorities was enacted 

in its place. While we appreciate congressional support for the concept, industry cannot afford to wait for Congress to again make its 

intention clear when it again works to reauthorize the FAA a full 

year from now. We urge the FAA to include a micro UAS classification in its forthcoming Notice of Proposed Rulemaking for operations over people. 

Improving Testing and Training 

Early reports from the FAA indicate that the first round of individuals who have taken the aeronautical knowledge test to obtain 

a remote pilot certificate have experienced a high rate of passage. 

While this is good news, there is evidence to suggest that these 

numbers will decline as more people pursue a certificate. Many of 

us in the industry have heard that the volume of information provided by the FAA to prepare for the test is not only overwhelming, 

but also largely focused on manned aviation, therefore discouraging 

people from signing up for the test. It is also a safe assumption 

that many of those who signed up to take the aeronautical knowledge test at its earliest availability are individuals with experience 

in the industry who have a strong foundation in the knowledge and 

skills required to pass the test. It will take time for realtors and 

other professionals who don’t have this experience and awareness, 

yet stand to benefit enormously from this technology, to endeavor 

to take the test and they will likely not experience the same levels 

of success. 

Further, remote pilot applicants must take the test in person at a designated FAA testing center. In addition to the $150 test fee, 

this is a burdensome and costly deterrent to compliance. The FAA 

acknowledged in the preamble to Part 107 that it may authorize 

online testing in the future if it can be conducted securely to prevent fraud and cheating. This type of security technology already 

exists and is used for testing and certification in other industries. 

The FAA should prioritize standing up an online testing program 

as soon as possible. 

Conclusion 

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Thank you for holding this hearing and for the opportunity to 

testify on behalf of Kespry and the Small UAV Coalition. As you 

can see, the commercial drone industry stands to deliver major economic and consumer benefits that will allow businesses of all sizes 

to thrive. Part 107 is a strong and positive first step in developing 

a comprehensive regulatory framework for small commercial drone 

operations. It is also proof that it is possible to boost opportunities 

for American innovation and manufacturing without being overly 

prescriptive and hindering industry’s ability to innovate and compete. We look forward to continuing to work with the FAA and 

Congress to ensure the United States develops and implements a 

comprehensive regulatory framework that allows for the safe and 

expedited integration of drones into the national airspace. 

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Chairman Hardy and members of the subcommittee, thank you 

very much for the opportunity to participate in today’s hearing on 

unmanned aircraft systems. I’m speaking on behalf of the Association for Unmanned Vehicle Systems International, the world’s largest non-profit organization devoted exclusively to advancing the unmanned systems and robotics community. AUVSI has been the 

voice of unmanned systems for more than 40 years, and currently 

we have more than 7,500 members, including many small businesses that support and supply this innovative industry. 

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Unmanned aircraft systems, or UAS, increase human potential, 

allowing us to execute dangerous or difficult tasks safely and efficiently. From inspecting pipelines to surveying bridges to filming 

movies, UAS help save time, save money and, most importantly, 

save lives. It is no wonder why thousands of businesses—small and 

large—have already embraced this technology, and many more are 

considering integrating it into their future operations. 

Today, we now have initial regulations governing civil and commercial UAS operations, which means even more businesses are 

cleared for takeoff. While these regulations have only been in effect 

for less than a month, there is strong evidence that the commercial 

UAS market is poised for significant growth, particularly among 

small businesses. Let me explain. 

On August 29, the Federal Aviation Administration implemented 

the small UAS rule, also known as Part 107. The rule was the result of years of collaboration between government and industry 

that established a flexible, risk-based approach to regulating UAS. 

This new regulatory framework helps reduce many barriers to lowrisk civil and commercial UAS operations. In reducing those barriers, the rule allows businesses and innovators to harness the tremendous potential of UAS and unlock the many economic and societal benefits the technology offers. 

Part 107 allows anyone who follows the rules to fly for commercial purposes. Generally speaking, operators need to fly under 400 

feet, within visual line of sight and only during daylight hours. 

However, recognizing the need for the rule to be flexible, the waiver process under Part 107 allows for expanded types of operations. 

It is clear that businesses are eager to take off. On the first day 

the rule went into effect, more than 3,300 people had already 

signed up to the take the aeronautical knowledge test, called the 

Unmanned Aircraft General (UAG) examination, which is one of 

the requirements under Part 107. Of the more than 530,000 people 

who have registered their UAS with the FAA since last December, 

about 20,000 have indicated they are commercial operators. The 

FAA expects that more than 600,000 UAS could be flying for commercial use over the next year. 

Until the regulation became effective, individuals and companies 

seeking to fly UAS for commercial purposes had to apply for an exemption under the Section 333 provision of the FAA Modernization 

and Reform Act of 2012. The FAA started granting Section 333 exemptions for certain low-risk commercial UAS applications in September 2014. From that time until the day the final rule took effect 

last month, the FAA granted more than 5,500 exemptions. 

These exemptions provide a window into how the commercial 

market is taking shape, the numerous industries embracing UAS 

and the most common applications for the technology. AUVSI analyzed each of the FAA exemptions and found that more than 5,200 

businesses received approval to fly for commercial purposes. Of the 

businesses that received exemptions, the vast majority are small. 

Over 90 percent of these businesses make less than $1 million in 

annual revenue and have fewer than 10 employees. Our analysis 

also found that UAS are being used in all 50 states for over 40 difSBREP-219A with DISTILLER

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1http://www.verascaninc.com/blogs/blog—detail/29 2http://www.flyboync.com/#!services/cuto 

3http://www.riseaboveimages.com/#/home 

ferent types of applications, including aerial photography, emergency management and utility inspection. 

These exemptions show that a wide number of small businesses 

across a range of industry sectors are adopting the technology. 

Whether it’s aiding search and rescue missions, advancing scientific research, responding to natural disasters, or helping farmers 

care for their crops, UAS are transforming the way many businesses operate. They also are creating several new ones—from 

startups focused on developing new UAS platforms to entrepreneurs creating new business models that offer specific UAS 

services. Other small businesses are eager to use UAS to improve 

their existing services and extend their capabilities. 

Let me provide some examples: 

• One of these businesses is Las Vegas-based Verascan, Inc., 

which provides imaging, mapping and surveying services to 

Nevada’s agriculture, mining, construction and oil and gas industries. This past year, it provided aerial survey data to assist 

in the construction of the I-11 Highway Boulder City Bypass, 

part of a proposed highway link between Phoenix and Las 

Vegas.1

• Another example is North Carolina-based Flyboy Aerial 

Photography. It was of the first professional photography companies in the Triangle region to use unmanned aircraft. Flyboy 

was founded by a husband and wife team. Their passion for 

photography and technology has led them to work closely with 

real estate agents seeking to show aerial views of property to 

potential buyers, as well as assist construction in surveying 

and mapping projects more accurately.2

• Finally, Cincinnati-based Rise Above Images provides aerial images for real estate agencies and construction companies 

in Ohio. The company helps attorneys and insurance agencies 

reconstruct and analyze the scenes of accidents as well as use 

aerial photography to help resolve land disputes.3

These are, of course, just a handful of examples of small business 

currently using UAS to advance their operations and services. And 

there are many, many more. 

An economic analysis by AUVSI projects that the expansion of 

UAS technology will create more than 100,000 jobs and generate 

more than $82 billion to the economy in the first decade following 

integration in to the national airspace. After witnessing the growth 

of the industry over the last few years and now with Part 107 in 

place, I am confident those figures will be even higher. 

There is no doubt that this year has been a productive one for 

UAS and, as a result, many American businesses are now able to 

fly. In addition to the implementation of the small UAS rule, Congress passed and the president signed an FAA extension measure 

which will advance UAS research, expand commercial operations 

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and enhance the safety of the national airspace for all users— 

manned and unmanned. 

Notably, the extension calls for the creation of a comprehensive 

UAS research and development roadmap to coordinate industry 

and government R&D initiatives. The extension also outlines a 

pilot program for UAs traffic management (UTM) and expands the 

section 333 exemption process to allow for beyond line of sight operations. 

While this measure will provide some short-term stability 

through September 2017, it is critical that Congress pass a longterm bill next year that will set the industry and the country on 

a glide path to reap all of the benefits of UAS. The extension is a 

good start, but there is still much more work to be done. 

As was recently highlighted at the White House’s Office of 

Science and Technology Policy and AUVSI Foundation’s first-ever 

drone workshop, government and industry collaboration is critical 

for keeping up with the pace of our industry’s innovations. Key 

stakeholders in industry and government have successfully fostered 

a working relationship that has led to a more flexible and nimble 

approach to regulating UAS, while small businesses have led the 

charge in adopting the technology. 

AUVSI is eager to continue this critical collaboration with the 

Department of Transportation, the FAA, Congress and other industry stakeholders through initiatives such as the newly-formed 

Drone Advisory Committee. 

In that same spirit, we are hopeful that the sustained efforts of 

all parties will help pave the way for a true, holistic plan for full 

UAS integration that includes beyond line of sight operations, 

flights over people, access to higher altitudes and platforms above 

55 pounds. Some of these efforts are already in motion. The FAA 

is currently reviewing the recommendations made by the MicroUAS Aviation Rulemaking Committee regarding flights over people 

and a draft rule is expected by the end of this year. 

The UAS industry is primed for incredible growth, thanks to industry representatives and government regulators nurturing innovation that helps small businesses be more competitive in the marketplace than ever before. We hope that these efforts can be sustained and that we continue to reach new historic milestones in integrating this technology into the national airspace. 

Thank you, again, for the opportunity to speak today. I look forward to answering any questions the committee might have. 

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SBREP-219A with DISTILLER


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SBREP-219A with DISTILLER


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SBREP-219A with DISTILLER


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SBREP-219A with DISTILLER


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SBREP-219A with DISTILLER


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SBREP-219A with DISTILLER


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SBREP-219A with DISTILLER


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SBREP-219A with DISTILLER


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SBREP-219A with DISTILLER


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SBREP-219A with DISTILLER


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SBREP-219A with DISTILLER


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SBREP-219A with DISTILLER


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SBREP-219A with DISTILLER


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53 

SBREP-219A with DISTILLER


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SBREP-219A with DISTILLER


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55 

SBREP-219A with DISTILLER


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SBREP-219A with DISTILLER


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SBREP-219A with DISTILLER


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Æ 

SBREP-219A with DISTILLER


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