How FAA Part 107 Regulations Will Shape the Drone Industry

Part 107 is the common name for the new set of commercial drone regulations put into place by the FAA in August of 2016. Part 107 lowers the barrier to entry for new drone firms meaning there are more drone services providers in the market than ever before. Previously drone companies had to acquire a Section 333 approval, requiring significant time and investment as well as a licensed pilot. Part 107 shifts the burden to individual pilots, requiring a pilot certification at a much lower cost (2-10% of the $7000+ required for Section 333).

Part 107 also leaves some drone regulations open for an exception using specific waivers issued by the FAA. Drone applications requiring FAA waivers could include night flights for media production or thermal imaging, waivers for operation over people for news broadcasts, waivers for the line-of-sight regulations for mapping and surveying operations or a waiver of the multiple craft regulations to allow the operation of drone fleets.

Though the influx of drone companies is good for innovation and market growth, with some estimating $82B in revenue and 100,000 jobs over next decade, but this growth also comes with risks. The significant investment required under Section 333 meant a drone company engaged in drone services had put significant investments into FAA certification, the drone hardware, the drone pilot, insurance and legal research. Clients retaining drone services firms should be aware that new, small or low-priced drone companies may meet the FAA regulations to fly but may not have the experience with the various state and municipal laws they also have to navigate for safe, legal operation. With the shift of FAA liability and licensing from drone-firm to pilot, even more attention needs to be focused on having experienced, quality pilots. Inexperienced pilots are only one risk to consider when evaluating a new drone services firm. Varying hardware capabilities from one drone company to another can mean difficulties for prospective clients. Evaluating a drone services provider’s hardware capabilities is just as important as understanding their experience and pilot credentials. Finally, a prospective client should ensure a drone services firm is fully insured in case of any accident or liability. Reputable drone operators carry at least $4 million in general liability insurance.

Beyond the risks of a rapidly expanding industry, Part 107 is really the first step of many in the new evolution of the drone industry. The new FAA testing requirements open new possibilities for commercial businesses because it sets the precedent that any commercial drone uses require Part 107 approval. Businesses that may benefit from drones are likely to hire that service rather than get an employee approval themselves, leading to demand for drone services firms. The FAA shift of the licensing burdens to a knowledge test allows their staff to focus on waivers for specific applications is an important change. This, in particular, will allow the drone industry to grow based on capability and common sense as opposed to strict regulation that could never feasibly cope with the rate of technological change.


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