What Drone Registration Means for Business

Logan Campbell - Logan@Aerotas.com

Earlier today, the FAA released their rule for registering drones.  This has gotten a lot of media attention for its impact on consumer drone operation and sales over the holiday season, but an often overlooked aspect is the impact that this rule will have on businesses operating drones.  Right now, the new registration system does not support registering drones for business use.  However, the full registration rule (available here) is 210 pages long, and contains numerous references to what using a drone for business will actually look like.   

Key Takeaways for Businesses

  • Starting March 31, 2016, this will effectively replace N-number registration for commercial UAS
  • Business registration will be by individual aircraft, not by company or pilot
  • The registration fee for companies will be $5 per aircraft
  • There is no information on individual pilot licensing requirements
  • Penalties for flying an unregistered aircraft can be as high as $250,000

These new rules only apply to registering drones, and are not a comprehensive set of regulations, which are expected to come out next year.  However, the FAA mentioned that these new rules do take into account the comments on the older NPRM, and clearly are the first step to the new “part 107” rules.  This gives us an inside look on what future rules will look like, and shows that drone registration will be a key component of the new rules.  It also hints that the administration is still on track to release their final rules in June of 2016.

According to the document, businesses will be able to start using this new, electronic registration system on March 31, 2016.  Because it is so much faster and easier than the current paper-based “N-Number” registration system, it will effectively replace that system once it is launched in March.  The older system will still be required for large aircraft (over 55 lbs), but it just wouldn’t make sense for drones, almost all of which are less than 55 lbs.  

The registration system for businesses will require each aircraft to be registered individually.  This is very different from the more publicized hobbyist rules, in which each pilot is individually registered, and they can have multiple aircraft under their one registration number.  Further, the fee for each aircraft registered will be only $5, a negligible amount in the realm of commercial applications.  Neither of these requirements will create any undue burden on commercial drone operations, which is a huge benefit for the industry.  

Conspicuously absent from this rule is any reference of a pilot’s license or “operator certificate” to fly legally.  This is a proposed requirement in the current NPRM, and is likely going to be necessary once part 107 is finalized.  It is unclear how the operator certificate will work into the registration rules.  

The FAA doesn’t go into much detail about the penalties for breaking their rules.  They mention that the upper limit for flying an unregistered aircraft is $27,500 in civil penalties, and $250,000 in criminal penalties, along with up to 3 years in prison.  This is likely to be an irrelevant number, however, as the FAA would likely use a number of other rules and penalties if they wanted to punish a corporation for operating illegally, as they did in their $1.9 million fine against SkyPan international.  

Overall, this is a step in the right direction for the FAA and the integration of commercial UAS into the national airspace.  As recently as 2 years ago, the FAA predicted there would only be 10,000 commercial UAS in operation by 2020.  This document finally updates that number to a more realistic 11 million, with 600,000 expected to be sold for commercial use in 2016 alone.  It clearly points out that they are building a system that can handle this volume, as the current registration system is not capable of handling this volume of new aircraft.  The FAA has finally acknowledged the full scale and potential of commercial drones, and is creating a system that will work accordingly.  The $5 fee and simple web interface will dramatically lower the regulatory burden of operating drones commercially, and will help to move the industry along.  Hopefully this trend continues to create a safe, legal, and responsible industry going forward.  

Do you have a different opinion?  Let us know in the comments below, or talk to us on twitter at @AerotasUSA.


Logan is the founder and CEO of Aerotas.  He graduated from Harvard Business School in 2015 and brings experience in a broad range of industries, including agriculture, real estate, and finance.  A lifelong tinkerer and avid UAV enthusiast, Logan also has hundreds of hours of flight experience over a broad set of different UAV types.