Micro-Aircraft Commercial Operators Association (MACO)

Newsletters

MACO Newsletter # 01          05 Apr 2006
Note: The first part of this Newsletter pertaining to the FAA was coordinated with HQ FAA on 20 April 2006

Current FAA Regulations regarding UAVs
The FAA, by federal mandate, controls all airspace in the National Airspace System (NAS) and issues regulations which govern the use of that airspace by all aircraft of all sizes, manned or unmanned. All aircraft are governed by Part 91, the most basic of the FARs. Part 91 requires all aircraft to be registered and have an airworthiness certificate. There are only two UA that have met both of those requirements: the Altair and Eagle Eye. Model aircraft for recreational use are excused from airworthiness and registration by AC 91-57 and public use UA are excused by receiving a COA.
 

There are very few exceptions to this rule:
 

1. If you are under contract to the military for developing and/or producing UAVs you can fly under their authority but it has to be in their restricted airspace and according to their rules.
 

2. The FAA does not control closed indoor airspace so if you are flying commercial UAVs indoors you are not under FAA jurisdiction. You will, however, need to comply with whatever rules the owner of the facility has established. It must be understood that there can be no direct interface to the NAS in order for it to be considered indoors. An open domed stadium would be considered part of the NAS. Your own private home with an open door is part of the NAS. I know it is splitting hairs but that is what lawyers do (I think it would be safe to say that the opening has to be large enough for the vehicle to pass through in order to disqualify it as indoors).
 

3. If you are flying in non-military restricted airspace (temporary or permanent) you can legally fly UAVs in that restricted airspace under the authority of and in accordance with guidelines established by the entity controlling that restricted airspace.
The FAA can also issue a Certificate of Authorization to fly Commercial UAVs. This has happened once, to my knowledge, in Arizona where a local Flight Service District Office (FSDO) issued a COA to an individual to commercially operate a Slow Stick type aircraft for aerial photography. Soon after this occurred Hq FAA removed the authority for local FSDOs to issue such COAs and moved the approval level to Hq FAA. The only COAs the FAA will consider at this time are those in support of public entities (Federal, State, Local public support entities) and will not issue any for civil/commercial organizations.
The pre-existing aircraft certification procedures (Standard, Utility, and Experimental) are available for UAVs. Two Experimental category certificates have been approved for private companies but with severe operating limitations. They were issued to General Atomics and Bell Textron, which are commercial operators.
 

There are currently three separate systems for obtaining approval to fly a UA.
(1) AC 91-57 for recreational use.
(2) COA is for the public operator
(3) The experimental airworthiness certificate for the civil operator.
Experimental certification is prohibited for commercial operation so that avenue is not available for us to use as commercial AP operators.
Insurance Background Information
 

First let's just talk about insurance in general. We are all familiar with auto insurance and the way that insurance companies will "total" a vehicle if it costs more than the book value to repair it. This is the way that insurance companies can limit their liability in such claims.
Liability insurance works in much the same way. The insurance companies are looking for ways to limit their liability and, in most cases we are familiar with, the insurance company liability limit is the face value of the policy. If you have a two million dollar liability policy that two million is the most they will have to pay. You are on the hook for the remainder.
Now let's see how this operates:
 

I currently have a two million liability policy but I know just what that means. The insurance company is going to do everything they can to limit their liability, which is their job. Let's say that my aircraft hits a bystander and slices a couple of fingers where they put up a hand to ward off the impact and as a result only got a gash on the head. The first thing I am liable for is all the medical bills and that should be well within the two million liability limit. However, the family decides to sue me in civil court for damages. This could be for anything an ambulance type lawyer can come up with; pain and suffering, loss of income, dizzy spells, emotional stress and an onslaught of fear of flying or airplanes, you have all seen it in the news.
 

This is a case where the insurance company will think that they have a chance of getting off with less than the liability limit of two million in an out-of-court settlement. Nobody, repeat nobody wants to get into the crap shoot of a jury trial. The insurance company is trying to minimize the impact so, with two million at stake; they are going to hire me a very good lawyer. This is what I am hoping for and why I have two million in liability insurance, I need the insurance company to realize it is in their best interest to hire a good lawyer to negotiate an out-of-court settlement with the lawyer for the plaintiff. If the insurance company can come out of this with a quarter million lawyer fee, half a million settlement, and fifty thousand in medical expenses they have made out. I have also made out because the insurance company is picking up the tab.
 

That, in fact is not a very severe case. Let's up the ante a bit and say my incident were to cause the injured party to loose the use of a couple of fingers on the right hand and the loss of the right eye. Now my insurance company looks at the case in an entirely different way. First of all, the plaintiff has a pretty good case so chances are they have a better lawyer. The lawyer for the plaintiff knows it is a good case and will take it to a jury trial if necessary. That means there is going to be no easy out-of-court settlement regardless of how good a lawyer my insurance company gets for me. In this case, it is better for the insurance company to "total" me and say "Here is our two million dollars; you are on your own". This is not a good situation for me because I am liable for everything over the two million.
 

In terms of insurance claims, these still are not that drastic and could happen to anyone. Think about what could happen if the UAV were to really cause some damage, or even death. It is something to think about.
 

Insurance Specific Information
Most insurance policies have language in them that says they are not liable if the activity you are engaged in when the incident occurs is illegal. I know my policy says that and if it didn't I would be concerned that I did not have a very good insurance company. Now, looking at the first part of this discussion about FAA regulations it is clear that if I have an incident while engaged in commercial UAV activities, which are against federal regulations, they have no liability at all. I know this and yet I pay $900 a year for a $2M liability policy. I also know that if I have an incident I am going to be entirely on my own and want to show that I have every good intention and am a responsible person. That is all I am getting for my $900 a year until the FAA comes up with some regulations that enable me to operate my small UAV legally.
 

This is why I have put my priority effort for the past year on helping the FAA formulate policies and procedures which will be used to govern the legal use of small UAVs in the NAS. It is wasted effort and makes no sense to beat the bushes looking for insurance coverage which is not worth the paper it is written on. Once the FAA has some form of regulation in place we will find it much easier to obtain insurance at reasonable prices. In order for this insurance to be of any value to us we will have to operate within the regulations.
 

General Discussion:
This information is based on discussions I have had with representatives of HQ FAA over the past year and is not set in concrete. Some of these ideas are based on actual discussions with these representatives and others are my own intuition and are items that I will discuss with the FAA when the time is right. These items are at a level of detail that has not been reached yet because the top level guidance is not really firm.
One of the first things I see is that the management of SUAV will be treated much the same whether they are used for recreational or commercial purposes. Recreational UAVs use the same airspace and pose the same threat as commercial UAVs and there is no rational reason for them to have different rules. The current guidance issued by the FAA giving AMA management responsibility for model aircraft is very general for the most part. It was issued back in the days when all model aircraft were pretty small by today’s standards and commercial use was unheard of.
 

The recreational aircraft of today are an entirely different matter. They now have aerobatic aircraft as large as 52% scale, weighing 75 lbs and swinging 38 inch carbon fiber propellers with a 30 hp gasoline motor. There has been one instance of a scale B-52 bomber weighing 400 lbs and powered by eight turbine engines. This is a much different type of recreational model aircraft than was possible a few years ago.
 

Modelers have always insisted on self regulation and I think that policy will continue. I think that in the future the AMA will have to develop more specific guidelines for modelers and it will be the responsibility of the AMA and, in some instances, the individual who will have to prove to the FAA that the aircraft is safe to operate. The same thing is true for commercial UAVs. It will be the responsibility of professional associations, organizations, and individuals who will have to prove to the FAA that the operational equipment, environment, procedures, and people are safe to operate in the NAS.
 

The FAA regulations will contain some specific guidance on size, weight, and speed of UAVs in different environments (urban high density vs. rural low density) and will also address procedural requirements such as the identification of a Pilot-in-Command (PIC) for each flight whether recreational or commercial. In the modeling world this will not require much change from today. Usually the person at the sticks is the PIC. There are some instances where it requires more than one person to operate and aircraft and in such instances a PIC will have to be designated. The PIC will have to be fully qualified to fly the aircraft and will be the responsible person for all operations involving that aircraft. This will also mandate the use of buddy cords for all flight training so that the PIC (Instructor) will be the person responsible for control of the aircraft. The same procedures will apply in commercial operations.
 

I am confident that the new regulation will require that all Small UAVs be flown in Direct Visual Contact (DVC) by the PIC at all times. This should not exclude flying an aircraft solely by video downlink, just not as PIC. This is easy enough to accomplish if the pilot flying "under the hood" is on a buddy cord with a fully qualified PIC on the master transmitter and maintaining the required visual contact with the UAV. I would expect that partial or interrupted vision situations such as having one eye covered with a video feed or having to look away from the aircraft to view a monitor will require the use of a trained spotter to assist with DVC. This situation may not require the spotter to be a fully qualified pilot but some level of training will be required to ensure safe operations.
Looking Forward:
 

The term PIC will probably evolve as technology advances. In large aircraft there are Air Traffic Controllers who handle several aircraft at a time. In the future it is reasonable to assume that one "Controller in Charge" could handle several aircraft and hand an individual aircraft off to a PIC if something unusual were to happen to and individual aircraft. Eventually this CIC principle will filter down to Small UAVs as Swarming and Flocking hardware/software control matures. The pacing technology in this environment will be the sense and avoid capability so essential to safe flight. That technology will be available for large UAVs before it is miniaturized and cost effective for the smaller versions. However, the term Pilot-in-Command is probably with us for the long term when referring to the one man, one plane concept of operations.
 

The FAA currently has contract support from the Massachusetts Institute of Technology (MIT) and Miter Corp (a Washington think tank) to get some higher level mathematical input to the problem but they are also reaching out to obtain operational information from existing successful Small UAV operations. I have been asked to formalize my input for a small (under 2 lb) urban environment and I know of one rural operation utilizing a 20 lb UAV which flies at 1000-2000 ft but still in DVC. I am sure there are others; these are the ones I am personally aware of.
 

I am scheduled to go to Washington again early summer to brief the HQ FAA UAV Program Office and meet with the folks I have been working with long distance all year. I am scheduled to fly an AP demo for them during that time. I am hoping they can get me a 200 ft "bubble" approved on the mall between the Capital Building and the Washington Monument. Their offices in L'Enfant Plaza are right across the street from this site. If this does not get approved, there is an alternate site which is a small park behind the FAA building. I also plan on flying my small helicopter with live video downlink in the conference room (assuming it is large enough). Anyway, it should be fun and I will report on the outcome as time permits.

John Zaner, President
Micro-Aircraft Commercial Operators Association (MACO)