Reed Smith Client Alerts

Unmanned aerial cameras have been legal in other parts of the world but prohibited for commercial use in the United States until last week, with the limited exception of two commercial-drone operations, which the FAA had previously approved for Alaskan oil operations. On September 25, 2014, the FAA announced that it approved certain uses of drones or unmanned aircraft systems (“UAS”) in the National Airspace System for film and TV productions. This is a breakthrough for the entertainment industry because drones allow filmmakers Superman-like abilities to take images at angles never before captured. Drones are able to cover altitudes lower than helicopters but higher than cranes, and can navigate indoor areas that are otherwise difficult or impossible to get to. However, the FAA’s approval is not without restriction.

The FAA must grant permission for all non-recreational (commercial) drone flights. Thus far, FAA permission has been granted to only six aerial photo companies for film and TV production. Additionally, various safety requirements are associated with the approval process. The FAA stated that these six applicants submitted UAS flight manuals with detailed safety procedures that were a key factor in their approval. Nevertheless, the requirements leave open the opportunity for operating requests from companies in other fields. In fact, the FAA stated it is currently evaluating requests from 40 companies (allegedly including Inc., which desires to test prototype delivery drones at its Seattle headquarters). Meanwhile, abroad – at DHL headquarters in Germany – drones are beginning deliveries of medications and other urgent goods to the island of Juist, after securing approval from state and federal transport ministries and air traffic control authorities to operate in restricted flight areas. These are referred to as “parcelcopters,” and illustrate the widespread potential future use and capability of UAS both domestically and abroad.

The FAA indicates that the government will follow with a more comprehensive policy governing the industry, but that this is an interim and safe solution to the demand for domestic commercial use of the technology. The safety requirements include that drones must be operated by licensed pilots; must not be flown out of the operator’s sightlines or flown at night; must be inspected before flight; and that a fire safety officer and emergency medical technician be on set. U.S. Department of Transportation Secretary Anthony Foxx stated that, “This is the first step to allowing the film and television industry to use unmanned aircraft systems in our nation’s airspace, and is a milestone in the wider effort to allow unmanned aircraft for many different types of commercial use.”

Sky’s the Limit As exhibited above with the DHL example and as implied by Anthony Foxx, the commercial uses for drones seem endless. Imagine UAS responsible for: large-scale irrigation and pesticide control of crops, product and mail delivery, promotional giveaways, and all manners of filming. Some advertisers are even using drones to fly banner ads. DroneCast is a Philadelphia startup that launched this week and uses actual banners that can run as long as 6 feet and fly about 25 feet in the air. Many operators do so with or without permission. The potential impact on the advertising and marketing landscape becomes exponential. For example, with a few companies having commercial approval to operate drones for production purposes, the market’s competition changes. Some having access to heightened technology, and not others, may cause frenzy for additional FAA approvals. The more the public has access to the sensational imagery enabled by drone technology, the higher the demand there will be for it. Traditional filming mechanisms may simply not cut it in terms of commercial advertising (whether it be for ads in film, TV or online). The fact that the door has been opened to few may, in the long term, make it impossible to not utilize this technology in a widespread fashion. Additionally, as companies implement product delivery by drone, like DHL in Germany, then shipping and overhead costs may be dramatically reduced, and convenience for consumers (e.g., same-day delivery) increased. We must consider whether all companies in the near future will need to offer these kinds of services to keep up in the marketplace.

Still a While Before Takeoff Regardless of the many commercial possibilities, federal and state legislators and law enforcement agencies remind us that perhaps widespread exploitation of drones is further off in the future than we might imagine. For example, flying drones at an altitude of more than 400 feet means they enter protected airspace and could interfere with air traffic control. Recreational use (as opposed to commercial use) is less strictly regulated and exhibits some of the same dangers regulators must consider with respect to commercial use. For example, recreational drone users have been fined and penalized for various safety reasons. According to the New York Times, two men were charged with reckless endangerment after the N.Y.P.D. said a drone the men were flying in Upper Manhattan came within 800 feet of an N.Y.P.D. helicopter near the George Washington Bridge in July. This appears to be one of several incidents related to recreational use that have recently occurred in the Big Apple.

Additionally, certain cityscapes are less appropriate for widespread use of UAS (whether such use be commercial or recreational), such as New York City, which Sen. Charles Schumer (D-N.Y.) recently called the “Wild West of drones.” The threat posed is that the airspace is not as open and operators currently have no way to communicate with one another for traffic control. Even in open spaces there are safety concerns. Individuals liken operating a drone to playing a videogame – not particularly difficult, but easy to make a mistake. Drones are readily accessible and can be purchased online for less than $100. The reports of drone crashes are on the rise and are now commonplace. Others continue to point to the fact that there are so many positive uses – cameras on drones have allegedly found missing children and stranded hikers, and cameras specifically suited for drones continue to improve. GoPro just announced a camera (the Hero4 Black) that, combined with drone technology, may continue to revolutionize media. The Hero4 Black allows filmmakers to shoot 4k digital at 30 frames per second and is touted as the most advanced GoPro ever, with improved image quality and a two-times more powerful processor. However, imagining a new universe with the worry of a drone potentially crashing onto a car windshield or flying into a consumer’s house delivering products, reminds us that various downsides and limitations remain.

Advertisers and Media Companies, Stay Tuned Although the technology exists for flying cars (a la “The Jetsons’”), safety concerns have prevented their advancement beyond the concept stage. Similarly, there are many reasons why widespread commercial use of drones may pose great danger and therefore be far off in the future. Moving on from Superman to Spiderman, the following tagline comes to mind, “with great power comes great responsibility.” Nevertheless, allowing UAS for limited film and TV production in the current marketplace means Internet advertising and other forms of media will need to keep up. The visual capabilities enabled by this technology may become something akin to high-definition video: simply expected by the consumer.


Client Alert 2014-254