Regulatory Impact Analysis for Enabling Regulations: The Federal Aviation Administration's Small UAS Rule Deborah Vaughn Aiken, Phd Director of Regulatory Analysis U.S. Department of Transportation

Background: What’s a Small UAS? UAS = Unmanned Aircraft System (“drone”) Small: <55 pounds UAS are aircraft and are subject to Federal Aviation Administration (FAA) regulations

Highlights of the Small UAS Rule (Part 107) First in a series of envisioned rules for routine operation of small UAS Effective August 2016 Requires UAS operators to obtain a Remote Pilot Certificate UAS operations must occur in pilot’s visual line-of-sight, in daylight conditions, and not directly over people Flights at 400 feet or below in uncontrolled airspace; other airspace requires authorization UAS must weigh less than 55 lbs. and be registered Includes a waiver process to allow for deviations from many of the rule’s operational restrictions

Baseline: Prior to Part 107 Rule Non-recreational, non-hobby, or commercial use of small UAS generally were not allowed (they were illegal) However, the Secretary of Transportation has authority to grant exemptions from the law on a case-by-case basis, for certain UAS commercial operations Through exemptions from the existing law, some operators had been able to enter the small UAS commercial market

Enabling Regulation Regulatory action that expands production or consumption opportunities Inherently deregulatory: imposes (net) negative costs Relaxes existing standards and allows new industries to unfold Part 107 small UAS rule was considered enabling since it reduced the cost of entry into the commercial market for UAS services Formal analysis of economic impacts was required for the rulemaking

Part 107 Regulatory Impact Analysis Existing exemption holders Experience reduced costs, since the complying with rule was simpler and less costly than the exemption renewal process Benefits are simply the reduction in costs New Part 107 pilots Rule enabled individuals to obtain a UAS pilot certificate without first obtaining a sport pilot license Considerable reduction in the cost to entry, which will attract new pilots to the industry because the rule lowered entry costs Benefits are expanded business opportunities Some modest costs for obtaining pilot certificate

Forecasting the Number of “New Part 107 Pilots”: The Difficult Problem We already knew the universe of 333 exemption owners, so calculating benefits for this market segment was straightforward Projecting the number of new pilots who would enter due to the relaxation of the requirements was more challenging Based on a marketing study that examined potential opportunities for UAS applications Used a wide range: For example, the estimated range for 2017 was between 37,400 and 937,500 new pilots

Benefits of the Part 107 Rule