The Washington Post
By Larry Downes
October 8 at 7:00 AM
As
the latest revolutionary digital technology takes off, entrepreneurs
are finding themselves battling federal regulators for permission just
to experiment with new applications.
This time, it’s not the FCC
(smartphone apps), the FTC (the Internet of Things), the FDA (genetic
testing), the Department of Transportation (driverless cars), the
Federal Reserve (bitcoin), state and local utility commissions (the
sharing economy) or the SEC (crowdfunding).
This time it’s the
Federal Aviation Administration, which has been struggling since 2012 to
develop rules for safely integrating unmanned aerial vehicles (UAV),
aka drones, into U.S. airspace.
To be clear, we’re not talking
here about the lethal, multi-million dollar military aircraft that are
changing the nature of warfare. We’re talking about small,
consumer-friendly devices that sell today to hobbyists and others for
less than $300.
That’s about the same as the price of a
smartphone, and the similarity is no coincidence. Most of the parts
used in today’s fast-growing drone market come from smartphone component
suppliers. The CPUs, GPS hardware, sensors, cameras, accelerometers,
gyroscopes and even software are the same. And drones often use phones
and tablets as their remote control. UAVs are basically flying
smartphones.
So as the production of over a billion smartphones
relentlessly drives down the price of these components through economies
of scale, drones are set to benefit from a similar pattern of
price/performance improvement, following the same faster-cheaper-smaller
principle that drives all digital products and services. Once
large-scale adoption begins, the sky’s the limit.
What will we do
with our drones? UAVs have already proven themselves ready to disrupt
everything from agriculture and natural resource management to law
enforcement, delivery services, photography and mapping. Amazon, for
one, has already demonstrated the feasibility of local delivery by
drone. Widespread use could revolutionize retail and take-out food
distribution, reducing traffic, pollution and fossil fuel consumption.
The
FAA conservatively estimates that, within a decade, private drones will
constitute a $90 billion industry. Already, according to the Consumer
Electronic Association, 2014 sales of UAVs are forecast at $84 million
and 250,000 units. By 2018, CEA predicts consumer drone sales will
approach $300 million and about a million units.
Pretty impressive, especially for a technology that is technically illegal.
That’s
right: for now, consumers may only operate UAVs below 400 feet, and
only for noncommercial uses. All other uses are prohibited. (After a
small drone crashed in New York, the FAA has argued inconsistently that
drones may not be operated anywhere near major airports.)
That
leaves drone enthusiasts operating in something close to the opposite of
the largely “permissionless” ecosystem that has spawned much of the
digital revolution elsewhere. Even testing new UAV applications
requires a special exemption from the FAA—hardly the best environment
for developing new products and services.
And the FAA hasn’t been
shy about enforcing its prohibition. It regularly sends
cease-and-desist letters for uses it deems commercial or dangerous. A
Dutch tourist was recently fined over $3,000 for crashing a drone at
Yellowstone National Park.
That could soon change. In 2012,
Congress ordered the FAA to develop rules that would allow commercial
UAVs to operate safely in U.S. airspace by 2015. (Safety, obviously, is
key.)
But we’re still waiting for the rules. The agency has
already missed several self-imposed deadlines, and in June a government
audit concluded the agency will miss Congress’s deadline. Rules for
small drones were promised three years ago, with the FAA now saying they
will come later this year.
That delay could prove disastrous.
Typically, the United States is first to explore the potential for new
digital inventions. But with drone-based agricultural and delivery
services already taking off in Europe and elsewhere, the United States
could lose its edge in developing new markets for drones and their still
largely unknown uses.
Though the FAA has yet to set a date for
its new rules, there are small signs of progress. Late last month, for
example, the agency granted the application of some filmmakers for an
exemption to use UAV-mounted cameras on set.
That may be the
first step toward freeing up drones for news gathering and commercial
services including delivery. With the filmmaking exemption granted,
applications for other commercial use exemptions are now increasing.
But
even with eventual federal safety rules in place, the drone market will
still face regulatory obstacles. In the absence of FAA guidelines,
state and even local governments have leapt into the breach, passing
confusing and incompatible regulations — and often prohibitions — on
drone use.
Some communities have been motivated by obvious safety
concerns, but more often the proscriptions are motivated by unease
about privacy.
So far, the privacy concerns have mostly been
speculative. UAVs, like nearly every other mobile device, have
high-definition cameras that continue to improve exponentially in both
quality and capacity. So, like Google Glass and other new video
technologies, UAVs tend to invoke a visceral “creepy” response in
consumers, who imagine the worst possible uses such technologies might
be put to against unsuspecting victims. They imagine drones hovering at
their windows, back yards, or public protests.
To be sure,
large-scale deployment of increasingly low-visibility drone technologies
will bump up against cultural and even legal restrictions on the
collection and distribution of information. At the same time, at least
in the United States, some of those concerns will be offset by strong
First Amendment protections for journalists and others.
It may be
that existing privacy protections and “Peeping Tom” laws are already
sufficient to bar the most offensive uses of drones. For law
enforcement applications, likewise, the Fourth Amendment has been
interpreted by courts to adapt to new technologies that challenge
personal privacy, and may curb police practices that most Americans
would find unreasonable.
But until the technology matures and the
truly disruptive applications emerge, pre-emptive prohibitions —
especially at the local level — could unnecessarily stunt the
development of valuable technology before it has a chance to prove its
worth to society.
That’s not a problem unique to drones.
Maintaining the delicate balance between protecting consumer values and
allowing new technologies to develop is a growing problem for
lawmakers. As the Internet revolution continues its “Big Bang”
expansion to businesses that have long been immune from disruptive
innovation, new products and services increasingly challenge old
assumptions about how industries are best organized and operated.
And
that in turn triggers the need to rethink rules that protect consumers
from harmful behaviors, as well as the kind of regulators best-suited to
define and enforce those protections.
With the launch of the
drone economy, the FAA has now joined the list of federal, state, and
local agencies whose core markets are or are likely to be transformed by
better and cheaper technologies.
But so far, the agency hasn’t displayed much urgency in responding to the challenge and opportunity.
The
fate of a multi-billion dollar industry is hanging in the balance. And
as history has amply demonstrated, regulators who move too slowly often
wind up sidelined or obsolete.
Which would prove especially
dangerous here. There is, after all, quite a difference between the
crash of a smartphone app and a drone.
Larry Downes is
co-author with Paul Nunes of “Big Bang Disruption: Strategy in the Age
of Devastating Innovation” (Portfolio 2014). He is a Project Director at
the Georgetown Center for Business and Public Policy.
- Source: http://www.washingtonpost.com
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