A Takeoff Window for Drones

A sudden thaw in the regulatory climate has given at least some U.S. operators of drone aircraft clearance to fly, but there may be more clouds creeping over the horizon. Here’s hoping the storm passes without grounding drones once again.

Drones got their unexpected boost when Patrick Geraghty, an administrative law judge for the National Transportation Safety Board, wrote that “There was no enforceable FAA rule” in place to support the Federal Aviation Administration’s decision to fine drone pilot Raphael Pirker for unauthorized flying. Pirker, 29, is an entrepreneur and photographer who used a small Styrofoam unmanned aerial vehicle (UAV) to create promotional images for the University of Virginia. The FAA charged him with operating a UAV for commercial purposes without a license and with flying recklessly close to pedestrians, buildings, and cars in a tunnel. The fine was set at $10,000.

Pirker objected to the fine, saying the FAA’s stance on a craft the size of the one he used was irrational. He did not, however, argue that the FAA shouldn’t regulate such devices at all; on the contrary, he told The Wall Street Journal, “One can clearly understand the FAA’s point of view that they want to regulate this.” Instead, he explained, he is against outright bans that make no distinction for a craft’s size and weight.

For now, Geraghty’s decision has opened the door to commercial use of drones, formerly banned in this country under most circumstances. The ruling authorizes for-profit flights of at least some model aircraft, though exactly how large those aircraft can be does not seem to be clear.

That ruling is unlikely to stand unchallenged. The FAA is appealing the National Transportation Safety Board’s decision, NBC News reported, and it seems probable that this incident will trigger a re-evaluation of current standards and, most likely, adoption of a new and presumably binding set of rules.

In the aviation world, private pilots (technically including me, though I have not actually flown in five years) cannot be paid to fly. For that, a pilot must hold a commercial pilot’s license, which requires adherence to stricter standards and more rigorous testing. The FAA’s action against Pirker implies that has it extended that mindset into the world of model aircraft and UAVs.

All thoughtful people should, like Pirker himself, support some restrictions. We would not want a total absence of regulation of UAVs. The sky is a dangerous place. So is the ground, for that matter, if things swoop or tumble out of the heavens unexpectedly.

But we shouldn’t have regulations so severe that they impede the valuable use, public and private, hobbyist and commercial, of unmanned aircraft.

The population of private pilots continues to drop steadily. Though anyone who appreciates aviation, as I do, would want to see more people encouraged to fly manned aircraft, the fact is that it is an expensive, time-consuming and relatively inflexible way to travel. Sure, you can fly to a lot more places than via commercial flight and do it on your own schedule. But in most aircraft, your speeds will be much lower, your range much more limited, and your schedule much more sensitive to weather disruption than when traveling in commercial or private jets, usually flown by professional pilots. General aviation is of only limited use for most of us as a means of transportation.

But there are many things you can do with a light unmanned aircraft, such as photographing real estate, observing wildlife populations and monitoring timber, livestock and other assets. In law enforcement and search and rescue, the uses are varied and apparent, as I discussed in this space a few years ago. We certainly want regulation in place to keep UAV use within safe parameters, but that doesn’t mean we want to regulate them into no use at all – not when they offer so many advantages and potential applications that can’t be easily duplicated by other means.

The FAA should get into the business of making these benefits available to Americans, not keeping them away from us. I hope the fallout of the recent decision leads to regulations that are smart rather than stifling.

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About Larry M. Elkin 564 Articles

Affiliation: Palisades Hudson Financial Group

Larry M. Elkin, CPA, CFP®, has provided personal financial and tax counseling to a sophisticated client base since 1986. After six years with Arthur Andersen, where he was a senior manager for personal financial planning and family wealth planning, he founded his own firm in Hastings on Hudson, New York in 1992. That firm grew steadily and became the Palisades Hudson organization, which moved to Scarsdale, New York in 2002. The firm expanded to Fort Lauderdale, Florida, in 2005, and to Atlanta, Georgia, in 2008.

Larry received his B.A. in journalism from the University of Montana in 1978, and his M.B.A. in accounting from New York University in 1986. Larry was a reporter and editor for The Associated Press from 1978 to 1986. He covered government, business and legal affairs for the wire service, with assignments in Helena, Montana; Albany, New York; Washington, D.C.; and New York City’s federal courts in Brooklyn and Manhattan.

Larry established the organization’s investment advisory business, which now manages more than $800 million, in 1997. As president of Palisades Hudson, Larry maintains individual professional relationships with many of the firm’s clients, who reside in more than 25 states from Maine to California as well as in several foreign countries. He is the author of Financial Self-Defense for Unmarried Couples (Currency Doubleday, 1995), which was the first comprehensive financial planning guide for unmarried couples. He also is the editor and publisher of Sentinel, a quarterly newsletter on personal financial planning.

Larry has written many Sentinel articles, including several that anticipated future events. In “The Economic Case Against Tobacco Stocks” (February 1995), he forecast that litigation losses would eventually undermine cigarette manufacturers’ financial position. He concluded in “Is This the Beginning Of The End?” (May 1998) that there was a better-than-even chance that estate taxes would be repealed by 2010, three years before Congress enacted legislation to repeal the tax in 2010. In “IRS Takes A Shot At Split-Dollar Life” (June 1996), Larry predicted that the IRS would be able to treat split dollar arrangements as below-market loans, which came to pass with new rules issued by the Service in 2001 and 2002.

More recently, Larry has addressed the causes and consequences of the “Panic of 2008″ in his Sentinel articles. In “Have We Learned Our Lending Lesson At Last” (October 2007) and “Mortgage Lending Lessons Remain Unlearned” (October 2008), Larry questioned whether or not America has learned any lessons from the savings and loan crisis of the 1980s. In addition, he offered some practical changes that should have been made to amend the situation. In “Take Advantage Of The Panic Of 2008” (January 2009), Larry offered ways to capitalize on the wealth of opportunity that the panic presented.

Larry served as president of the Estate Planning Council of New York City, Inc., in 2005-2006. In 2009 the Council presented Larry with its first-ever Lifetime Achievement Award, citing his service to the organization and “his tireless efforts in promoting our industry by word and by personal example as a consummate estate planning professional.” He is regularly interviewed by national and regional publications, and has made nearly 100 radio and television appearances.

Visit: Palisades Hudson

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