Drone Industry to Boom with Pending ATC Reform – Lawyer Monthly | Legal News Magazine

Drone Industry to Boom with Pending ATC Reform

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Civil drone operations in the US may be about to get more civilized. Last month, the Trump administration kicked off “infrastructure week” by touting a plan to corporatize the nation’s dependable albeit “ancient, broken, antiquated, horrible” air traffic control (“ATC”) system. Marc L. Warren and Steven J. Seiden of US based Jenner & Block explain all you need to know about the latest reform proposals.

Under the proposed reforms, which are reflected in recently proposed House legislation and commonly referred to as “ATC Reform,” FAA’s responsibility for managing the nation’s ATC system would be transferred to an independent, not-for-profit corporation governed and funded by the stakeholders and users of the system. Many believe these measures, if adopted, would represent a quantum leap in the effort to modernize our nation’s aging ATC system – the equivalent of swapping an Atari for an Xbox. While the success of this game-changing system will ultimately be decided by the players – airlines, airports, and the business jet and general aviation communities – the drone industry may be the biggest beneficiary of ATC Reform.

Currently, the FAA’s 14,000 air traffic controllers manage more than 50,000 flights per day, yet do so primarily with World War II-era ground-based radar technology that limits the capacity of the system and simply can’t keep pace with growth. Since 2000, FAA has been working to introduce digital communications and GPS systems to replace the outdated technology, but the agency’s implementation of “NextGen” has been glacially slow due to inadequate government funding streams, procurement delays, and bureaucratic inefficiencies. ATC Reform promises to rapidly accelerate the deployment of cutting-edge technology and air traffic management systems that would not only reduce aircraft delays, optimize routings, and increase system capacity, but hasten the integration of drones into the national airspace system (“NAS”).

Under ATC Reform, FAA would maintain safety oversight and sharpen its focus as a regulator, while the new “corporatized” ATC entity would be responsible for upgrading, operating and managing the ATC system. The new system would be funded through airspace user fees and long-term revenue bonds (not taxes), with any surpluses available for reinvestment into the system to facilitate deployment of new technologies to make our airspace safer, smarter, and more cost-effective.

To date, the economic justification for ATC Reform has largely focused on anticipated benefits to commercial airlines and the customers they serve. But ATC Reform may also be the key to optimizing drone operations by integrating drones into the NAS through a modernized and comprehensive air traffic management system. Drone users and manufacturers have, for years, complained about the sluggish pace of FAA efforts to integrate drones into the NAS. While the agency’s sense of urgency has improved in recent years with the issuance of regulations governing small (i.e., less than 55 lb.) drones, these “aircraft” remain isolated from the airspace where commercial airliners and other aircraft operate – confined to low-altitudes away from airports, required to remain within visual line of sight of the remote pilot, and otherwise relegated to a subordinate status in the NAS.

With ATC Reform, however, the prospects and timeline for full integration could be markedly improved. A fully independent, corporatized airspace manager could be more responsive to industry needs, and more rapidly deploy technology to help integrate drones safely and seamlessly into the NAS. For example, the entity could work with NASA to unlock the potential of UAS Traffic Management (UTM), a proposed air traffic control system for low-altitude drones that many believe will integrate drones faster, smarter and better. Rather than segregate drones from other traffic in the NAS, the new ATC system would be well-positioned to integrate drones such that they are on par with other aircraft.

But lurking beneath the promise of integration is a potential drag: local regulation. Nearly all 50 states and countless municipalities have either passed or considered laws imposing restrictions on drone use, including those relating to land use, zoning, privacy, trespass, and law enforcement. While Congress granted FAA the statutory authority to regulate all aspects of air safety and aircraft in flight, and federal courts have frequently invalidated local attempts to regulate aircraft, the drone industry remains apprehensive about the formation of a patchwork of inconsistent, confusing state and local drone regulations that could potentially interfere with the free-flow of commerce – and with an integrated air traffic management system.

As with aviation generally, preemption will blunt most of the state and local regulations on drones. But some state and local jurisdiction over the use and effect of drones is appropriate and inevitable. Where the precise boundary lies between federal authority and state and local authority is not always obvious, but Congress and the Courts will be called upon to define it as drone operators mature and their operations grow more sophisticated and expand in scale.

ATC Reform means UAS reward. New structure and technology, and new thinking, can incorporate drones into a holistic “ecosystem” of air traffic that will optimize airspace and consumer benefits. Now relegated to a subordinate class and segregated airspace, drones can be full participants in a fully integrated airspace. ATC Reform is not without its detractors, but if it happens in any form, drones may be its biggest beneficiaries.

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