The frontier of the emerging drone economy is a collision between innovation and regulation. (Daniel Mauerer/EPA)

Eric Austin is a rarity — an entrepreneur who has clawed his way to a successful drone business inside U.S. borders. He’s on the cutting edge of an emerging field.

It all started when Austin was blowing $38,000 over five years at hobby shops pursuing his passion for remote controlled airplanes and helicopters. Soon he decided he wanted to make it a career. So in 2010 he took out a loan on his house to buy two small remote controlled helicopters, and told his wife he planned to tie a camera to them and make a business of it.

Six months into the experiment Austin quit his day job and went all in on drones. Since then the HeliVideo founder has traveled the world with stops in South Korea, Mexico and Dubai to help shoot commercials, TV shows and movies.

Operating in the United States has been another story as the commercial use of drones has largely been prohibited. And the rules for hobbyists have left many confused and frustrated as regulators have struggled to keep up with a rapidly developing field. Austin said he lost $750,000 in revenue because of jobs he had to turn down. In desperate moments he accepted jobs in the United States, feeling the need to support his family.

But a grateful Austin says his business was saved this September when the FAA granted exemptions to him and five other drone operators. The exemption required Austin to acquire a private pilot license, the type of certification one gets to fly a 2,550-pound Cessna. He’s currently about halfway through the process, and his colleague with a pilot license is handling their current jobs.

Austin says flight school has “absolutely nothing to do with flying a drone,” but he has grown to understand the reasoning for the rule. “You can’t just let anybody fly a multirotor in front of Brad Pitt’s face,” he said. For 90 percent of his jobs his drones fly at between five and 35 feet off the ground.

While Austin accepts the FAA’s regulations, others are miffed with the current landscape, where hobbyists aren’t hassled, but commercial purposes are generally prohibited. Drone advocates say the country’s slow march toward drone regulations threatens the country’s innovative tradition.

“It’s sad. We are giving up the industry of the future here,” said Patrick Sherman, co-founder of the Roswell Flight Test Crew. “We are handing the next Internet to China.”

A recent Wall Street Journal report only heightened concerns, reporting that the upcoming proposal of FAA rules on commercial drone operators will require a license, and operation within sight of the person in control of the drone.

“The fact that it’s gotta be within the line of sight, the fact that it’s gotta have a private pilot license associated with it, you’re essentially killing the industry,” said Michael Drobac, executive director of the Small UAV Coalition. “We’re not seeing the same approach by Canada, the UK, Australia, India, Japan, Germany. They’re all way ahead of us.”

Google has gone to Australia to test drone delivery. Amazon is also testing outside the United States and told the FAA it may move more research overseas. Even those drone operators receiving the FAA exemption have lost out on some jobs this fall while waiting for the FAA to approve their specific gigs.

Drone operators I spoke with, many of whom have pilot licenses, agree that the skill-set to operate an unmanned drone and manned aircraft have little overlap aside from the value of understanding airspace and communicating with others in it.

“I think it’s sort of a blunt instrument,” said Skyward founder Jonathan Evans of the pilot license. His company is developing software for drone systems. “It’s not the right license by any means. Once this regulatory body matures more we’ll probably get something that looks a little more precise.”

Many in the drone community are dismayed over what one operator described as a “velvet glove” treatment for hobbyists and “iron fist” for commercial operators.

“We’re already operating under strict guidelines and knowledge of air space, knowledge of aircraft operation, we have medical operations. Taking it one step further to require a pilot license when you can have a five-year-old who can legitimately fly whatever they want under 55 pounds under some loose guidelines, I think is absolutely fundamentally the most ridiculous thing I have ever heard,” said Kevin Kochersberger, the director of the unmanned systems lab Virginia Tech. “I just can’t say how totally screwed up it is. There aren’t words to describe.” The school is one of six FAA test sites conducting research on drones.

“I can fly all I want over my fields as a hobbyist because you know, as long as I’m keeping it in line of sight, as long as I’m not going over 400 feet and I’m not operating within the range of an airport,” said Idaho farmer Robert Blair. “However I am now commercial when I use that same airframe, same cameras but use that data to make management decisions. That doesn’t make sense.”

“Safety should not be dictated based on whether or not the activity is commercial,” said Dave Mathewson, executive director of the Academy of Model Aeronautics. “Safety is safety and that is how it should be addressed.”

Blair would like to use drones to take photos of his crops and monitor their growth. In Japan drones have been used to tend to crops since the 1980s.


Here a Yamaha RMAX unmanned helicopter, which is commonly used in Japan, sprays water during a demonstration at a test vineyard at the University of California-Davis’s Oakville Station. (Rich Pedroncelli/AP)

Many of those interviewed pointed to Canada’s rules as a sensible model for drone regulation. The country’s standards consider whether a drone is being used for work or research, but also take into consideration a drone’s weight. The idea being that a three-pound drone has a lot less energy than a 50-pound drone, meaning the associated risks are much lower. A small and low-powered drone might be less dangerous than a batted baseball, but larger drones can be deadly.

The nightmare scenario would involve a careless operator near an airport flying his drone into the engine of a plane that’s taking off. While drone software could use GPS to automatically render itself inoperable near airports, that wouldn’t stop someone who built his own drone or hacked the software. Since June 1 there have been 25 reports of near-collisions between small drones and passenger aircrafts.

Some of those I spoke with offered sympathy for the FAA as it attempts to fulfill its Congressional mandate to integrate unmanned aerial vehicles in the sky while UAV technology rapidly advances, creating new circumstances to consider.

“The pace of innovation is so phenomenal that if you try to write standards you’re chasing the moon,” said Ro Bailey, director of the Pan-Pacific UAS Test Range Complex in Alaska.  “You’re never going to catch it.” A few year ago drones were strictly the domain of the military, now they’re toys that will appear in droves under Christmas trees this month.

“The fact that it gets a little darker before the dawn is completely normal in regulation,” said Chris Anderson, the chief executive of drone manufacturer 3D Robotics. “It’s still early days. I’m just not that concerned about our long-term prospects in this country and I don’t feel by any means that the FAA’s current thinking is the end of the process.”