Do You Need an FAA Section 333 Exemption?

DroneWire  |  November 22, 2015
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Many entrepreneuers view drones as the dawn of an emerging technology that stands to impact society at levels not seen since the advent of the Internet, or the introduction of smartphones.

There’s never been a better time to start a drone business. The Association for Unmanned Vehicle Systems International (AUVSI) predicts that the U.S. market for Unmanned Aircraft Systems (UAS) will create $82 billion in economic activity over the next 10 years. Many entrepreneuers view drones as the dawn of an emerging technology that stands to impact society at levels not seen since the advent of the Internet, or the introduction of smartphones.

In addition to understanding state and local laws, comprehension of federal unmanned aircraft requirements is an essential component of the successful unmanned aerial services business. Responsible for overseeing all aspects of American civil aviation, the Federal Aviation Administration (FAA) created the Section 333 Exemption program in 2014 for authorizing commercial operations in the National Airspace System (NAS).

The FAA maintains that drone flights involving any form of “commercial activity” are prohibited without approval, citing authority granted to the agency in section 333 of the FAA Modernization and Reform Act (FMRA). Approval to operate an Unmanned Aerial Vehicle (UAV) for commercial purposes is granted through the FAA’s Section 333 Exemption program.

Section 333 Exemption Program

To receive a Section 333 Exemption, companies or individuals must submit a petition to the FAA that details their planned drone operations, equipment, and safety protocols. Each approved company must also register any drones they will be using, and affix a tail number to the aircraft.

Companies that receive a Section 333 Exemption must agree to adhere to a rigorous set of operational guidelines that include:

  • Use of an FAA-licensed aircraft pilot to operate the UAV platform.

  • Use of a Visual Observer (VO) for all commercial flights.

  • Maintaining operational records that must be presented on demand to FAA inspectors.

  • All flight operations must be conducted at least 500 feet from nonparticipating people, vehicles, or structures.
As of this writing, over 2,200 companies have received 333 exemption approval.

Section 333 Exemption Program Legal Controversy

The 333 program was met with skepticism by drone industry insiders and enthusiasts, many of whom believed the licensed pilot requirement was excessive and irrelevant. Some aviation law experts have challenged whether the FAA has legal authority for regulating commercial UAS operations under current law.

Peter Sachs is a Connecticut-based attorney, helicopter pilot, and UAV industry advocate who maintains that the FAA has misinterpreted the authority granted to the agency through FMRA. On his website, Sachs points out that FMRA provisions do not apply to the general public, and that the FAA has created new model aircraft regulations in light of such practices being expressly forbidden in section 336 of FMRA.

In August 2014, Sachs and others filed suit in the D.C. Circuit Court of Appeals, challenging the FAA’s interpretation of FMRA section 333. That case, filed by well-known “Drone Attorney” Brendan Schulman, is ongoing.

Small Drone Notice of Proposed Rulemaking (NPRM)

In February, the FAA issued its Small Drone Notice of Proposed Rulemaking (NPRM). Hailed as a step in the right direction, the document (which is subject to a lengthy modification process) outlines the future direction of federal drone policy. Notably, the NPRM replaces the Section 333 Exemption’s certified pilot requirement with a new Unmanned Aircraft Operator Certificate.

When finalized, the provisions in the Small Drone NPRM will become federal law governing the operation of UAVs in the NAS. The Section 333 Exemption program will be replaced by the new policy. The FAA’s timeframe estimates for completion of the NPRM process range from mid-2016 into 2017.

So, should I apply for a 333 exemption or not?

Each individual or company will have to make this decision on their own. Here are some final thoughts to consider.

Obtaining 333 exemption approval may offer the following benefits:

  • Fulfills federal requirements for commercial drone operations.

  • Ranks your business among organizations that represent the bleeding edge of UAV technologies; added marketing credibility.

  • Ability to secure UAV service contracts that require 333 exemption approval.

  • Early adoption of FAA guidelines may present future regulatory benefits.
Some UAS companies have fully embraced the 333 exemption program, and work with the FAA to further develop drone initiatives and policy. Many of these businesses maintain an active presence within the drone industry, appearing at trade shows, working with organizations that represent UAV interests, and educating lawmakers.

Thwarted by the 333 exemption’s certified pilot requirements, some hopeful drone entrepreneurs are waiting for the finalized rules to be in place before starting new ventures. In an industry that moves at the speed of imagination, this approach may have some setbacks.

For others, the time and costs associated with acquiring a 333 exemption, and adhering to its operational requirements, have proven too much of a burden, especially when considering that the policies will be largely overwritten in the near future.

Some reasons we’ve heard against pursuing 333 exemption approval include:

  • Licensed pilot requirement is not cost-effective for your business model.

  • Adherence to stringent operational guidelines can be challenging.

  • Controversy surrounding legal standing of 333 exemption program.

  • Time and effort required to receive 333 authorization, considering program to be replaced in near future.
Thousands of individuals and businesses are using drones across the U.S. every day, for commercial purposes, without having been granted an exemption. The FAA has a history of using very broad definitions to identify commercial drone use, and routinely contacts some of these companies through phone calls and letters, to warn them against operating a drone commercially without 333 exemption compliance.

To date, there is no record of the FAA taking enforcement actions against any commercial drone operator for violating the agency’s 333 requirement.

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