[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]




 
     TAKING FLIGHT: SMALL BUSINESS UTILIZATION OF UNMANNED AIRCRAFT

=======================================================================

                                HEARING

                               before the

                      COMMITTEE ON SMALL BUSINESS
                             UNITED STATES
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                               __________

                              HEARING HELD
                             JULY 15, 2015

                               __________

                               
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            Small Business Committee Document Number 114-019
              Available via the GPO Website: www.fdsys.gov
              
              
              
              
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                   HOUSE COMMITTEE ON SMALL BUSINESS

                      STEVE CHABOT, Ohio, Chairman
                            STEVE KING, Iowa
                      BLAINE LUETKEMEYER, Missouri
                        RICHARD HANNA, New York
                         TIM HUELSKAMP, Kansas
                        TOM RICE, South Carolina
                         CHRIS GIBSON, New York
                          DAVE BRAT, Virginia
             AUMUA AMATA COLEMAN RADEWAGEN, American Samoa
                        STEVE KNIGHT, California
                        CARLOS CURBELO, Florida
                          MIKE BOST, Illinois
                         CRESENT HARDY, Nevada
               NYDIA VELAZQUEZ, New York, Ranking Member
                         YVETTE CLARK, New York
                          JUDY CHU, California
                        JANICE HAHN, California
                     DONALD PAYNE, JR., New Jersey
                          GRACE MENG, New York
                       BRENDA LAWRENCE, Michigan
                       ALMA ADAMS, North Carolina
                      SETH MOULTON, Massachusetts
                           MARK TAKAI, Hawaii

                   Kevin Fitzpatrick, Staff Director
            Stephen Dennis, Deputy Staff Director for Policy
            Jan Oliver, Deputy Staff Director for Operation
                      Barry Pineles, Chief Counsel
                  Michael Day, Minority Staff Director
                  
                   
                                  (II)
                  
                  
                  
                            C O N T E N T S
                                                      
                            

                           OPENING STATEMENTS

                                                                   Page
Hon. Steve Chabot................................................     1
Hon. Nydia Velazquez.............................................     2

                               WITNESSES

Mr. Brian Wynne, President & CEO, Association for Unmanned 
  Vehicle Systems International, Arlington, VA...................     4
Mr. Mike Gilkey, CEO and Director of Flight Operations, 3D Aerial 
  Solutions LLC, Dayton, OH......................................     6
Mr. Brian Streem, CEO/Cofounder, AeroCine, Brooklyn, NY..........     7
Dr. Tim McLain, Professor of Mechanical Engineering & Director of 
  the Center for Unmanned Aircraft Systems, Brigham Young 
  University, Provo, UT..........................................     9

                                APPENDIX

Prepared Statements:
    Mr. Brian Wynne, President & CEO, Association for Unmanned 
      Vehicle Systems International, Arlington, VA...............    24
    Mr. Mike Gilkey, CEO and Director of Flight Operations, 3D 
      Aerial Solutions LLC, Dayton, OH...........................    29
    Mr. Brian Streem, CEO/Cofounder, AeroCine, Brooklyn, NY......    36
    Dr. Tim McLain, Professor of Mechnical Engineering & Director 
      of the Center for Unmanned Aircraft Systems, Brigham Young 
      University, Provo, UT......................................    39
Questions for the Record:
    None.
Answers for the Record:
    None.
Additional Material for the Record:
    MPAA - Motion Picture Association of America.................    42
    NAR - National Association of Realtors.......................    44
    
    
    
    
    
                                (III)   
    
    
    


     TAKING FLIGHT: SMALL BUSINESS UTILIZATION OF UNMANNED AIRCRAFT

                              ----------                              


                        WEDNESDAY, JULY 15, 2015

                  House of Representatives,
               Committee on Small Business,
                                                    Washington, DC.
    The Committee met, pursuant to call, at 11:00 a.m., in Room 
2360, Rayburn House Office Building. Hon. Steve Chabot 
[chairman of the Committee] presiding.
    Present: Representatives Chabot, Luetkemeyer, Hanna, 
Huelskamp, Brat, Radewagen, Knight, Curbelo, Bost, Hardy, 
Kelly, Velazquez, Meng, Lawrence, Clarke, and Moulton.
    Chairman CHABOT. Good morning. The Committee will come to 
order.
    It was at a bicycle shop in Dayton, Ohio, which is just 
north of my congressional district by coincidence, where two 
entrepreneurs dreamed up a machine that would fly people 
through the air. It took a bold spirit to think that big. And 
even bolder spirit to test it. But Orville and Wilbur Wright 
persevered and changed the course of history. A little more 
than a half century later, we would fly to the moon, and a half 
century after that, we are discussing an era when men and women 
do not even need to be in the aircraft to pilot it. Dayton, 
Ohio led them, and it is leading again, and one of our 
witnesses here today is a testament to that.
    We are here today to examine the commercial usage of 
unmanned aircraft by small businesses, to look at the benefits 
of this technology, and discuss some of the concerns 
surrounding safe operations. Most importantly, we will have a 
conversation about how America can once again lead the world in 
a new era of flight.
    The potential uses of unmanned aircraft systems or UAS is 
limitless. They can be used by local broadcasters to gather 
footage and report the news. They can be used by farmers to 
better manage their crops. They can be used by engineering 
firms to inspect bridges. And they can be used by first 
responders to help save lives.
    At the University of Cincinnati, students are working with 
a fire department to develop aircraft that give real-time 
information to firefighters and emergency crews about where a 
fire is burning and where it is moving. Currently, the Federal 
Aviation Administration is working to integrate unmanned 
aircraft systems, or UAS, into the national airspace system. On 
a case-by-case basis, the FAA is authorizing low-risk 
commercial UAS operations. The FAA also has proposed a rule to 
allow small unmanned aircraft--those weighing 55 pounds or 
less--to operate in our skies. The proposed rule includes a 
number of operating restrictions aimed at ensuring safe 
operations.
    I'm interested in learning from the small businesses and 
innovators, whom we have here today, on the frontlines about 
how the FAA's current process is working for them and how the 
porposed rule, once finalized, may affect their operations. I 
am also looking forward to hearing how their small businesses 
are utilizing this new technology and planning for the day when 
UAS are fully integrated into American airspace.
    There are moments when we can unleash a positive force of 
innovation and job creation if we don't smother it with 
regulations. Most of the time, the government misses these 
moments and we are left to wonder what could have been. There 
is always a balance to be struck. While we must promote public 
safety and proper usage of unmanned aircraft, we must ensure 
that the regulations are carefully crafted so that they don't 
prevent this new industry from innovating and helping grow our 
economy, and most importantly, create jobs.
    I am eager to hear what our witnesses have to say about 
their own experiences, and I look forward to seeing how this 
new industry grows, and as it does, creates new opportunities 
for small businesses to capitalize on new technology.
    I would now like to recognize our ranking member for her 
opening statement this morning.
    Ms. VELAZQUEZ. Thank you, Mr. Chairman, and thank you for 
holding this important hearing.
    America's entrepreneurs have long played an important role 
in the development and growth of unmanned aerial vehicles 
(UAV). While the evolution of these systems has been a game 
changer for our military, the benefits are not limited to the 
battlefield. Civilian drones can be employed for a wide range 
of commercial uses, and some companies are experimenting with 
this technology to deliver products to consumers. UAVs offer a 
cost-effective solution for everything from agriculture, to 
news coverage, to mapping and surveying terrain, to the film 
industry.
    For our overall economy to remain competitive, it is 
important that the United States continue researching and 
developing this technology. Should we wait, other countries 
will likely pass us by in this emerging market. Japan has 
already moved forward aggressively to address safety and 
airspace regulation issues. Europe is expected to account for 
15 percent of procurement of unmanned aerial vehicles, while 
European companies will produce nearly 4 percent of UAVs.
    As we work to ensure the United States remains on the 
forefront of developing this technology, small businesses must 
continue playing a critical role. The Small Business Innovation 
Research Program and the Small Technology Transfer Program have 
been an important public-private partnership that has harnessed 
entrepreneurs' ingenuity to move UAV technology forward. This 
committee can play an important oversight role in helping 
ensure those initiatives operate as Congress intended and help 
ensure small companies remain involved in drone development.
    Beyond the small business participation in UAV research, a 
number of other important policy issues must be addressed in 
order for commercial drone technology to fully blossom. The 
FAA's recent proposed rulemaking on licensing of drones and 
regulations of speed and altitude appears to be a good step in 
the right direction. It is my hope that today we can obtain a 
better understanding of how small companies, both as developers 
of drone technology and potential users will be impacted by the 
rulemaking.
    In addition, there are significant privacy concerns 
associated with unmanned aerial systems. As always, the 
challenge will be balancing the need to protect the public from 
potential abuse, while allowing room for this new technology to 
take root, grow, and help fuel commerce.
    Mr. Chairman, entrepreneurs have a significant stake in how 
our nation proceeds with the regulation and development of UAV 
technology. It is my hope that by working together with the 
industry, our nation can harness the full potential of this 
nascent technology, providing an exciting new sector for small 
businesses and creating opportunity for new jobs and economic 
growth.
    With that, let me thank the witnesses for coming here to 
testify, and especially I want to welcome a small business 
owner from my district, Mr. Streem. And it is a business that 
is changing the face of the film industry. Welcome.
    Chairman CHABOT. Thank you very much.
    Ms. VELAZQUEZ. I yield back the balance of my time.
    Chairman CHABOT. Thank you.
    If Committee members have opening statements, I would ask 
that they submit them for the record.
    And I will take just a moment to explain our five-minute 
rule, which is basically you get five minutes to speak. And 
there is a lighting system there to assist you. The green light 
will be on for about four minutes, the yellow light will come 
on to let you know you have got about a minute to wrap up, and 
the red light will come on and we would ask you to try to stay 
within that as much as possible. We will give you a little 
leeway but not a whole lot. So we thank you for being here.
    And our first witness I will introduce now is Brian Wynne. 
Mr. Wynne is the president and CEO of the Association for 
Unmanned Vehicle Systems International. AUVSI is the largest 
trade association representing the unmanned systems and 
robotics industry. Mr. Wynne has significant transportation and 
technology experience. He has served in executive positions at 
the Electric Drive Transportation Association, the Intelligent 
Transportation Society of America, and the Association for 
Automatic Identification and Mobility. Mr. Wynne holds a 
bachelor's degree from the University of Scranton, and a 
master's degree from the School of Advanced International 
Studies at Johns Hopkins University.
    Our next witness will be Mike Gilkey, who is the CEO and 
Director of Flight Operations for 3D Aerial Solutions LLC, a 
Dayton, Ohio unmanned aircraft systems start-up company. Mr. 
Gilkey has over 30 years of experience working on national 
security programs, primarily for the Air Force Research 
Laboratory at Wright Patterson Air Force Base in Ohio. He has 
worked on airborne sensors research and development, as well as 
advanced projects for unmanned military. Or excuse me, unmanned 
military aircraft. Mr. Gilkey and some colleagues from the 
defense industry founded 3D Aerial Solutions in 2013. It was 
the second company in Ohio to be granted a Section 333 
exemption by the FAA and is now performing commercial 
operations for the agriculture industry in the Midwest. Mr. 
Gilkey earned both a Bachelor of Science and Master of Science 
in Electrical Engineering.
    Our third witness, Brian Streem, is a filmmaker and 
entrepreneur as the ranking member mentioned. He is the CEO and 
Cofounder of AeroCine, a commercial unmanned aircraft systems 
designer, builder, and operator located in the ranking member's 
district, as I mentioned, in New York. Mr. Streem has produced 
five feature films, including Sundance Film Festival winner 
``James White.'' He also produced television commercials for 
Uber, Gatorade, Ralph Lauren, Toyota, Nokia, and Samsung. Mr. 
Streem is a graduate of the NYU Tisch School of Arts, where he 
studied filmmaking with a focus in art and technology. In 2013, 
Mr. Streem founded AeroCine with fellow NYU Tisch graduate and 
filmmaker, Jeff Brink. And AeroCine was one of the first 
companies in the United States to receive permission to operate 
from the FAA.
    And I will now yield to Ms. Velazquez to introduce Dr. 
McLain.
    Ms. VELAZQUEZ. It is my pleasure to introduce Dr. Tim 
McLain. Professor McLain is the director of the National 
Science Foundation Sponsor Center for Unmanned Aircraft System, 
which in conjunction with a number of universities performs 
industry-sponsored research related to unmanned aircraft 
systems. He has over 15 years of research experience in this 
technology and has even been a cofounder of two USA startup 
companies. In addition to his duties at the Center for Unmanned 
Aircraft Systems, Professor McLain also teaches in the 
Mechanical Engineering Department of Brigham Young University.
    Welcome. Thank you for being here today.
    Chairman CHABOT. Thank you. We thank you all for being 
here.
    Mr. Wynne, you are recognized for five minutes.

  STATEMENTS OF BRIAN WYNNE, PRESIDENT & CEO, ASSOCIATION FOR 
 UNMANNED VEHICLE SYSTEMS INTERNATIONAL; MIKE GILKEY, CEO AND 
 DIRECTOR OF FLIGHT OPERATIONS, 3D AERIAL SOLUTIONS LLC; BRIAN 
    STREEM, CEO/FOUNDER, AEROCINE; TIM MCLAIN, PROFESSOR OF 
 MECHANICAL ENGINEERING & DIRECTOR OF THE CENTER FOR UNMANNED 
           AIRCRAFT SYSTEMS, BRIGHAM YOUNG UNIVERSITY

                    STATEMENT OF BRIAN WYNNE

    Mr. WYNNE. Thank you, Chairman Chabot, Ranking Member 
Velazquez, and members of the Committee. I appreciate the 
opportunity to be here today to talk about unmanned aerial 
systems--I mean, aircraft systems, excuse me.
    I am speaking on behalf of the Association for Unmanned 
Vehicle Systems International, the world's largest nonprofit 
organization devoted exclusively to advancing the unmanned 
systems and robotics community. AUVSI has been the voice of 
unmanned systems for more than 40 years, and currently, we have 
more than 7,500 members, including many small businesses that 
support and supply this high-tech industry.
    Unmanned aircraft systems increase human potential, 
allowing us to execute dangerous or difficult tasks safely and 
efficiently. From inspecting pipelines and surveying bridges, 
to filming movies, and crops, the applications of UAS are 
virtually limitless and offer a superior way to see what needs 
to be seen in less time at less expense.
    For years, AUVSI has been the leading advocate for the safe 
integration of UAS in the national airspace system. We were 
delighted earlier this year when the Federal Aviation 
Administration published its long-awaited proposed rules for 
commercial and civil operations of small UAS, which are systems 
that weigh 55 pounds or less. These proposed rules are a 
critical milestone in the UAS integration process and bring us 
closer to realizing the tremendous societal and economic 
benefits of this technology.
    As the FAA has worked on these rules, much has already 
changed in the industry. Since Congress tasked the FAA with 
creating UAS regulations in 2012, the technology has gone from 
a specialized tool to a must-have business asset. The flood of 
commercial exemption requests to the FAA shows that a mature 
UAS commercial market is waiting to be unleashed. Of the more 
than 700 exemptions--and I am given to understand 800 now--the 
website is still catching up with the number of exemptions that 
have been issued, the vast majority are small businesses. Just 
as smartphones and tablets revolutionized our economy over the 
past decade, UAS are transforming the way a number of 
industries operate and are creating several new ones as well.
    Let me provide some examples. North Carolina-based 
Precision Hawk is a startup that manufactures UAS and Cloud-
based data collection software. Its platform is helping farmers 
survey crops and assisting insurance companies with claims 
following natural disasters. The company is also helping the 
FAA and industry research extended visual line of sight 
operations in rural areas. Precision Hawk started in 2010 with 
six employees and now has more than 70 with multiple offices in 
the U.S. and around the world.
    Another example is California-based Aerial MOB. The film 
company was one of the first to receive a commercial exemption 
from the FAA. It has since performed the first-ever FAA-
approved film production project with a major Hollywood studio 
and a number of promos among others. My colleagues will give 
additional examples of real-world small business applications 
of UAS.
    The FAA continues to approve about 50 new commercial 
operations a week, a process that has recently been 
streamlined. However, this current system of case-by-case 
approvals, whether streamlined or not, is not a long-term 
solution for the many small businesses wanting to fly.
    As an industry, we want to see the integration of UAS 
proceed and without any further delays. It is important that 
the FAA finalize the small UAS rules as quickly as possible. 
Once this happens, we will have an established framework for 
UAS operators that will allow anyone who follows the rules to 
fly.
    Equally important, Congress needs to pass, and the 
president needs to sign into law an FAA reauthorization measure 
before the current authorization expires on September 30, 2015. 
This measure is critical in the most immediate way to achieve 
the necessary steps to encourage innovation and ensure the 
continued safety of the national airspace while accelerating 
the commercial use of UAS.
    It is not just the many uses of this technology that are at 
stake, but also the 100,000 jobs and 82 billion in economic 
impact that the UAS industry is expected to create in its first 
decade following integration. With the right regulatory 
environment, there is no question these numbers could go even 
higher. But the longer we take, the more our nation risks 
losing its innovation edge, along with billions in economic 
impact.
    Thank you for the opportunity to speak today and I look 
forward to answering any questions.
    Chairman CHABOT. Thank you very much.
    Mr. Gilkey, you are recognized for five minutes.

                    STATEMENT OF MIKE GILKEY

    Mr. GILKEY. Good morning, Chairman Chabot, Ranking Member 
Velazquez, and members of the Committee. It is a pleasure to be 
here today to discuss an entrepreneur's perspective of the 
emerging unmanned aircraft systems industry.
    Unmanned systems hold the potential to truly revolutionize 
our economy and way of life. Unmanned aircraft systems provide 
innovative new tools for the common man, which are being 
employed in uncommon ways. A new industry is being born, 
resulting in the creation of many new small businesses.
    Small business people like me are slugging their way 
through the obstacles and bureaucracy to fulfill our dreams of 
creating this new industry. We are pioneers determined to 
succeed and believe the country and the world will be 
beneficiaries.
    I welcome the opportunity to be here today to inform the 
Committee of our story and explore how Congress can foster a 
more accommodating environment for small business, which 
ensures safe operations and protects privacy.
    My colleagues and I created 3D Aerial Solutions in 2013 to 
leverage our expertise working with military unmanned aircraft 
and transition advanced technology know-how to civilian 
problems. We self-funded 3D Aerial through an initial round of 
owner investment and began buying aircraft and equipment. We 
purchased a senseFly eBee aircraft, which I have here today, 
because it is highly automated, easy to use, and precise.
    We are now sales agent for this product line. We began 
flying under the Academy of Model Aeronautics Hobbyist rules 
and became experts on the use of this equipment. 3D Aerial 
became an affiliate member of the Entrepreneur Center, a 
technology business incubator in Dayton, Ohio, to gain access 
to business advice and meeting facilities.
    3D Aerial believes we in the UAS industry have a 
responsibility to reach out and educate the public, and to this 
end, we started the Dayton Drone Users Group for community 
outreach. Our private business was not eligible to apply for a 
certificate of authorization in order to fly commercially. We 
collaborated with the Ohio-Indiana UAS Center and Test Complex 
and were able to fly on a COA they established.
    For the most part, however, we spent a year and a half in a 
holding pattern awaiting for the authority to make money flying 
aircraft. 3D Aerial submitted our request for a Section 333 
exemption on October 14, 2014, and was granted an exemption on 
March 3, 2015. We were the second company in Ohio to be granted 
this exemption. 3D Aerial received the corresponding COA on 
March 23rd and completed registration of our aircraft on May 
7th.
    With these steps complete, we are now authorized to legally 
perform commercial flying services limited only to flights of 
the eBee aircraft and only for agricultural applications. The 
blanket COA allows us to operate throughout the United States 
but is subject to a large number of significant restrictions.
    3D Aerial is now providing UAS flight services to perform 
aerial imaging of crops using the eBee. We also process the 
imagery into a variety of desired image products which we 
provide to the farmer. We are in the process of hiring more 
pilots and buying more aircraft. Small UAS, like our eBee, can 
fly much lower than manned aircraft and can offer extremely 
high image resolution less than one inch per pixel. They also 
can be operated very inexpensively and virtually on demand.
    The FAA issued its Notice of Proposed Rulemaking for 
operation and certification of small UAS on February 23rd. 
Implementation of final rules is not expected until mid-2016 at 
the earliest. While there are still many restrictions, the 
current rules as proposed will represent a step forward for the 
small UAS industry.
    3D Aerial's primary concerns with the new rules as a small 
business operator are the cost to gain FAA operator 
certification, the phase-in period for compliance with new 
rules, impact of state and local rules restricting UAS 
operations, and enforcement of regulations.
    In closing, it is an exciting time to be in the emerging 
commercial UAS industry. If fostered through a reasonable 
balance of regulations to protect national airspace and 
accommodating economic policy, small business will be a 
significant engine of growth delivering on the promise of new 
jobs and expanded tax base that will benefit our economy. 
Furthermore, the advanced technology capability we offer today 
will continue to improve and provide growing value to our 
society.
    On behalf of my colleagues at 3D Aerial Solutions, I thank 
you for allowing me to speak to you today.
    Chairman CHABOT. Thank you very much.
    Mr. Streem, you are recognized for five minutes.

                   STATEMENT OF BRIAN STREEM

    Mr. STREEM. Thank you.
    Chairman Chabot, Ranking Member Velazquez, and members of 
the Committee, my name is Brian Streem, and I am the cofounder 
and CEO of AeroCine, a drone company that uses unmanned aerial 
vehicles to fly Hollywood cameras for movies, television, 
advertising, and real estate, among other things. Thank you for 
having me here today and for holding this critical hearing. 
Ranking Member Velazquez, we are proud to be constituents of 
your district. It is my honor to be here before all of you.
    I wish I could tell you that I am one of the world's 
foremost roboticists or rocket scientists, but for a hearing 
such as this----
    Chairman CHABOT. Let me interrupt you just one second.
    Mr. STREEM. Sure.
    Chairman CHABOT. In case anybody has not noticed, as you 
see on the screen, listen but watch.
    Mr. STREEM. Do more watching than listening.
    I wish I was one of the world's foremost rocket scientists 
or roboticists, but for a hearing such as this, my experience 
as an artist and NYU film school graduate is really the story. 
It also just so happens I am building my own drones and 
consider this part of the new American dream.
    The unmanned aerial system industry worldwide has created a 
new generation of entrepreneurs who are innovating with small 
businesses that will reshape the global economy. Safe and 
responsible use of UAS will be ubiquitous across every sector 
of the economy. Unfortunately, this worldwide phenomenon is in 
jeopardy here at home in the United States due to the current 
state of regulation that prohibits commercial operations absent 
an exemption.
    I consider myself lucky, as AeroCine was among the very 
first U.S. companies and the very first New York company to 
receive the FAA exemption to operate commercially, but to 
continue to have to seek permission to adapt and change to a 
client's need is expensive, it is time consuming, and it is 
frustrating. And yet my passion for the industry has not waned.
    Three years ago, witnessing a helicopter flying a miniature 
camera capturing breathtaking video, I was astonished, and I 
realized that this new technology would introduce the world to 
a new creative frontier, in addition to hundreds, if not 
thousands of additional efficient and paradigm-shifting 
innovations, the implications for filmmaking were readily 
apparent. Film producers make extensive use of cranes, camera 
cars, helicopters, all in an elaborate effort to get the best 
shot. This is sufficient and still viable in some cases, but 
drones are more cost effective when operated responsibly and 
can greatly reduce potential risk to human lives. A drone has 
the capability to replace all of these on film sets while 
reducing the risk to human life and enhancing the artistic 
pursuit. What excited me about drones three years ago is the 
same thing that excites me today. At their very core, drones 
present a way to easily place a sensor anywhere in three-
dimensional space; what could once only be dreamed can now be 
produced.
    When my partner, Jeff Brink, and I started AeroCine, we 
planned to simply purchase a drone to carry large cinema 
cameras. Finding no suitable system on the market, we drew from 
academic and aerospace circles to build a team of engineers and 
set out to create an aerial-robotic system of our own. Today, 
our work ranges from designing custom UAVs to operating UAVs 
for big budget films, television shows, live programs, and 
special events. We are proud to be bringing to consumers image 
and video that has never been created.
    The FAA's efforts to integrate UAVs into the national 
airspace are commendable in the face of extraordinary 
challenges. One notable step is the increased speed with which 
the FAA is awarding Section 333 exemptions. The publication of 
Proposed Rule for Small Drones is also promising, but we 
understand we may be a year or more away from a final rule. And 
even so, the proposed rule is in many respects too restrictive, 
evidenced by many companies' move to test in Canada and 
elsewhere. If we do not scramble to bring our regulations up to 
speed, our innovators will be eclipsed by entrepreneurs and 
other countries that have an established legal framework.
    Before we conclude, we would like to invite the members of 
the Committee to visit our website, AeroCine.com, to view some 
of our captivating cinematography that this new technology has 
allowed us to capture. We would like to also thank the small 
UAV coalition for its leadership in promoting the UAV industry. 
AeroCine stands ready to assist this Committee and the U.S. 
Congress in bringing this exciting technology to consumers, and 
we thank you for your leadership in holding this hearing.
    Mr. Chairman, Ranking Member Velazquez, and members of the 
Committee, this concludes my opening statement. I look forward 
to answering any questions from the Committee. Thank you.
    Chairman CHABOT. Thank you very much.
    Dr. McLain, you are recognized for five minutes.

                    STATEMENT OF TIM MCLAIN

    Mr. MCLAIN. Thank you, Chairman Chabot, Ranking Member 
Velazquez, and members of the Committee, for inviting me to 
speak today. I will provide the perspective of a professor who 
has been involved in unmanned aircraft systems research for 
over 15 years and who has interacted with small businesses in a 
variety of ways.
    I am a professor of mechanical engineering at Brigham Young 
University and currently direct a National Science Foundation 
sponsored research consortium called the Center for Unmanned 
Aircraft Systems. The center brings together researchers from 
industry and academia to collaborate on research challenges 
facing the UAS industry. Our research universities include BYU, 
the University of Colorado, and Virginia Tech.
    From my perspective, small businesses have played a vital 
role in the creation and growth of the UAS industry in the 
United States. Without doubt, a significant portion of the 
innovation in the UAS industry has come from entrepreneurial 
startup companies.
    During the last decade, as unmanned aircraft have had a 
transformational impact on military operations, and as the 
promise of regulatory change has increased their viability for 
commercial applications, larger companies have taken greater 
interest in small UAS. Illustrating the importance of small 
business to the UAS industry, a common approach for large 
companies to enter or become more competitive in the UAS 
marketplace has been for them to acquire small, innovative 
companies.
    As regulations are put in place to allow commercial flights 
of UAS, there will be a shift away from defense applications 
and an acceleration of market opportunities. This is 
particularly true for small UAS due to their accessibility and 
relatively low costs. Applications that have been envisioned 
for small UAS include agricultural monitoring, infrastructure 
inspection, wildlife monitoring, package delivery, aerial 
mapping, and many more. As Mr. Wynne has testified, AUVSI 
projects that the 10-year economic impact of UAS in the United 
States will be $82 billion, with over 100,000 new high-tech 
jobs created.
    Because many UAS application markets are undeveloped and 
high risk, it is likely that small, innovative businesses will 
be the first to enter these markets, to build them, and to 
prove their viability and value. More than ever, small business 
is essential to the growth and maturation of the UAS industry. 
These businesses will include both developers of UAS products 
and providers of UAS services.
    Current UAS market estimates are based on specific 
applications that have already been identified. From my 
perspective, even more exciting than these known applications 
are those that have not yet been conceived. Much like the 
Internet of the 1990s, the potential of unmanned aircraft to 
enhance our lives is in its infancy and we do not yet have a 
full sense of the impact of this technology.
    To enable and accelerate growth in the UAS industry and 
facilitate the participation of small businesses, the 
regulatory barriers to entry must be kept low. If the cost of 
obtaining authorization to fly are too high, then these UAS 
markets of opportunity will be closed to all but larger 
companies that are well capitalized. Smaller companies will not 
be able to participate and bring their creative products to 
market. Costs for UAS technologies and services will remain 
high, innovation and progress will be hampered, and the U.S. 
will lose its competitive leadership position in an industry 
that it pioneered.
    The progress of UAS research and commercialization in the 
United States has been inhibited by the lack of a regulatory 
framework that allows unmanned aircraft flights to take place. 
The FAA's small UAS Notice of Proposed Rulemaking is a good 
step forward that will help accelerate growth in many UAS 
application areas and allow viable UAS businesses to be 
established. The small UAS rule, however, only allows flight 
within visual line of sight of the operator. For many important 
applications, such as oil pipeline monitoring and package 
delivery, beyond line-of-sight capabilities are essential. 
Regulations permitting safe beyond line-of-sight flight are 
needed to allow the benefits of UAS technology to be fully 
realized.
    In summary, small businesses have played a vital role in 
the development of the U.S. unmanned aircraft industry by way 
of their vision, innovation, and willingness to take risks in 
emerging technology markets. As we move into the future of 
commercial UAS applications, small businesses will continue to 
make critical contributions to the success of this important 
industry.
    Thank you again for the opportunity to address the 
Committee. I look forward to any questions that you may have.
    Chairman CHABOT. Thank you very much.
    And to be fair, we apply the same five-minute rule to 
ourselves that we applied to you, so we will all stay within 
five minutes ourselves. And I will recognize myself for that 
purpose at this time.
    Mr. Wynne, I will begin with you. Aging infrastructure, as 
I am sure you know, is a significant issue all across the 
United States. In my own district, we have the Brent Spence 
Bridge, which we are struggling with trying to find a way to 
replace it. It is considered functionally obsolete. What are 
the benefits of using UAS to inspect aging infrastructure 
around the country? And if you want to give examples, that is 
fine.
    Mr. WYNNE. I think they are very significant, Mr. Chairman. 
Typically, when you are inspecting a bridge, you have to close 
that bridge. People have to potentially hang off the bridge in 
harnesses and look. We have enormously sophisticated sensors 
today that can be mounted on these platforms that can actually 
do that job, in some instances better than the ``mark one 
eyeball.'' So being able to actually fly a UAS under a bridge, 
rather than putting a human under it, can actually not only 
increase the safety of that operation but also increase the 
effectiveness of it.
    Chairman CHABOT. And obviously, I mean, UAS can have 
different forms. This one is a fixed wing. Now, if you were 
inspecting a bridge, I assume it would be more of a helicopter?
    Mr. WYNNE. Rotary based.
    Chairman CHABOT. Yeah. Okay. Thank you.
    All right. Mr. Gilkey, let me turn to you, if I can. And it 
is great to have an Ohio company that is a trailblazer for this 
new industry appear before the Committee. You have described 
the challenge of the evolving regulatory environment for a 
small business like 3D Aerial Solutions. What are some of the 
other challenges that you have encountered or are currently 
encountering?
    Mr. GILKEY. One of the biggest challenges we have is with 
public perception. People are afraid of drones who are not 
educated on what they can do and the safety aspects of it. That 
is something that challenges us and that is why we feel a 
responsibility to do community outreach, which we are doing 
with the Dayton Drone Users Group. That is one of the biggest. 
And state economic development funding is flowing in the state 
to support work in this area. It is not coming to companies 
like ours. It is disproportionately going to public 
institutions and research institutions that do not provide 
benefit to companies like 3D Aerial.
    Chairman CHABOT. When you say some people are afraid of 
drones, what are they afraid of?
    Mr. GILKEY. Privacy rights violations is the primary 
concern, and then safety is a second.
    Chairman CHABOT. Okay. Thank you.
    Mr. Streem, I will turn to you now. In your testimony, you 
noted that the proposed rule for UAS, I believe, is too 
restrictive. What are your concerns with the operating 
restrictions that the FAA has proposed?
    Mr. STREEM. One of them is the ability to fly at night. 
There have been several instances where on closed set 
filmmaking, we have been asked by Hollywood productions to use 
a drone at night and we were unable to do the operation. We 
believe we can do it safely, and not being able to do it, it 
means, quite frankly, we did not get the job.
    Chairman CHABOT. Okay. Thank you.
    Dr. McLain, I will turn to you now. In your testimony you 
stated that ``to enable and accelerate growth in UAS industry 
and facilitate the participation of small business, the 
regulatory barriers to entry must be kept low.'' And I tend to 
agree with you. Does the FAA's proposed rule for small UAS, in 
your belief, strike the right balance between ensuring safe 
operations and permitting small businesses to participate in 
the development of industry?
    Mr. MCLAIN. I believe that the proposed rule is a good step 
forward in the right direction, but there are some limitations 
to it that have been mentioned--the beyond line-of-sight 
restrictions, as well as the restrictions that Mr. Streem 
mentioned that do not allow nighttime flight. Those are a 
couple of restrictions that I believe could be carried out 
safely with the implementation of proper technology and proper 
regulations. Like I said, I think the small UAS rule is a good 
step forward, but I think many of the most promising 
applications for small UAS, or even larger UAS, are not 
encompassed by that rule.
    Chairman CHABOT. Okay. Thank you. My time is about expired.
    I think this is a very interesting topic that we are on 
here today, and I have heard the same concerns, Mr. Gilkey, 
that you have heard, and have seen some of the programs, 60 
Minutes and some of the others that you have people afraid you 
are going to have somebody flying one of these up to your 
window and looking in or they are going to be doing something 
they should not be doing, or even terrorists, or who knows. And 
it was not particularly helpful when this knucklehead in the 
copter came up here on Capitol Hill. Now, that was not an 
unmanned vehicle, obviously, because he was in it, but there is 
always potential abuse in anything but I think this is 
something that could be tremendous for our country and job 
creation if we do it right. And you are all here helping us to 
make sure that we do get it right. So thank you for being here.
    And I will now yield to the gentlelady from New York.
    Ms. VELAZQUEZ. Thank you, Mr. Chairman.
    Mr. Wynne, one survey found that many companies are unclear 
of the current FAA regulations; yet, they continue to operate 
commercial drones anyway. This arbitrary rule-following is 
troublesome and could present a risk to the public safety. What 
can be done to avert a recurrence of this behavior and increase 
the level of public adherence to the regulations?
    Mr. WYNNE. I am going to answer that with one word and that 
is education. There are a lot of people that are coming into 
this community, into the unmanned systems and robotics 
community that are not aviators, and they are operating in 
aviation space, in the national airspace system. And it is not 
a particularly complex system in some respects, but in other 
respects it really is. If we looked at the number of instances, 
I think what we would find is that many of them might be real 
estate agents who want to take a picture of a house from a 
different angle that have not bothered to get a Section 333. I 
am opposed to that. People need to obviously respect the law, 
and until we have the proposed rules finalized which would 
allow such operations, they need to get a Section 333.
    Ms. VELAZQUEZ. So you do not feel that any enforcement 
mechanism should be put in place?
    Mr. WYNNE. I think it would be very appropriate for the FAA 
to enforce the rules, and if you are flying for money illegally 
without a 333 exemption, enforcement should be carried out. It 
is very difficult to do that at this stage of the game, which 
is why we were encouraging the FAA to finalize those rules very 
quickly.
    Ms. VELAZQUEZ. Professor McLain, there are some countries 
that have already solved some of the airspace integration 
problems the FAA is addressing in these rules. Have the current 
regulations in this area prevented us from solving these issues 
at the same pace as other countries?
    Mr. MCLAIN. So the regulations in other countries are in 
many respects similar to the small UAS rule. There are some 
countries where they have beyond-line-of-sight flight 
capabilities. But the FAA, I think the biggest problem with 
their approach thus far is just the pace at which they moved 
forward. The regulations that were in place prior to 2007 are 
essentially the same regulations that the FAA is proposing to 
enact this year. So the question would be, why has it taken 
nine years to bring about the current UAS rule proposal? In the 
course of these nine years, small businesses have come and gone 
because of the lack of a regulatory framework.
    Ms. VELAZQUEZ. So you do not see any steps that other 
countries have taken that could be implemented here by the FAA 
to expedite the process?
    Mr. MCLAIN. Well, I think the small UAS rule is a good step 
forward, and I think if they could get that in place, that 
would close the gap between the regulations in other parts of 
the world and what we have currently in the United States, 
which is very, very limiting.
    Ms. VELAZQUEZ. Thank you.
    Mr. Streem, your business holds a certificate of 
authorization from the FAA that allows it to commercially fly 
drones for close-range aerial imaging. How difficult was it for 
your firm to obtain the certificate?
    Mr. STREEM. It was incredibly difficult, in particular, 
because we were one of the first to file for it. There was no 
roadmap to really go by.
    Ms. VELAZQUEZ. But my question is, today, are you aware if 
it is complex and difficult?
    Mr. STREEM. I am not because I am not going through the 
process. I would expect it is simpler.
    Ms. VELAZQUEZ. Okay.
    I have a question about insurance and liability. I 
understand that not too many carriers are providing insurance, 
and so what risk does it pose to the public and to those who 
have drones at this point?
    Mr. STREEM. Yes. We have insurance. It is expensive.
    Ms. VELAZQUEZ. One study found that two-thirds of 
businesses operate without commercial liability.
    Mr. STREEM. Right. It is an expensive cost for small 
businesses that many avoid until they have to. We just got our 
insurance recently when we just began to fly, and we have 
collision and liability insurance for our operations.
    Ms. VELAZQUEZ. And with two-thirds, what is happening when 
accidents occur and the operator does not have insurance?
    Mr. STREEM. I do not know.
    Ms. VELAZQUEZ. They will be taken to court?
    Mr. STREEM. Yes.
    Ms. VELAZQUEZ. Okay. Thank you.
    Chairman CHABOT. The gentlelady's time is expired. Thank 
you.
    The gentleman from California, Mr. Knight, is recognized 
for five minutes.
    Mr. KNIGHT. Thank you, Mr. Chair.
    Thank you for the Wright Brothers' history there. I always 
appreciate that, and I appreciate seeing all these new 
companies here since the Wright Brothers beat out government 
contract over 100 years ago, and I think that that is kind of 
the story.
    My questions are, and I think either Mr. Gilkey, maybe Mr. 
Wynne, talked about privacy. We have had some recent problems 
in firefighting in California where folks have flown UAS into 
the firefighting scene trying to get some pictures or put 
something on the Internet. They have interfered with 
firefighting operations. In fact, at one point they had to stop 
drops into the area because of the UAS actions by civilians. 
How does your industry feel about that? Should there be some 
talk about that in Congress? Should there be some restrictions 
on that? How do you feel?
    Mr. WYNNE. I am happy to field that one. My son is a 
firefighter, so I feel very strongly.
    In all of these instances, a temporary flight restriction 
(TFR) was put up around the operation, and the airboss for that 
TFR, whoever was actually handling the operations was having to 
divert his traffic because there were things flying around in 
there that did not belong and they were not under positive 
control. That is a bad thing. That is a bad thing in any 
temporary flight restriction, whether it is over a sporting 
event or any other place.
    I think education is, again, key. We have people flying 
right now who are not aviators. They do not understand exactly 
what a TFR is. They are violating FAA regulations and those 
regulations need to be enforced because there are lives and 
property at stake. So the community feels very strongly that 
this is our responsibility to educate our operators and make 
certain.
    We have a difficult situation right now because in those 
instances, they might actually be people who are flying that 
are not commercial operators, and anyone can go and buy a UAS 
from a local electronics store. Again, we have a ``Know before 
you fly'' campaign that we have stood up with other 
organizations, such as the Small UAV Coalition, the Academy of 
Model Aeronautics, and the FAA is cooperating. We have 
tremendous support from across the general aviation community 
to get the word out that here is where the TFR is; stay out of 
the way. If there are firefighting operations going on, you 
cannot fly.
    Mr. KNIGHT. Right. And I think we have seen that. You know, 
we have had this type of activity for 50-plus years. It is just 
somebody put a camera on one and turned it from a RC to a UAS. 
And that is kind of the systems we are working on today.
    Recently, or in the last year and a half, they have 
released seven testing sites for UAS all over the country. My 
state did not get one, but they are in the works to get these 
new sites, these Excellence sites. Do you think that these 
testing sites are something that UAS need, or can we just test 
these things in all 50 states and we could probably flourish 
more? And the reason I say that is because California did not 
get a testing site, although we do most of the testing in 
California.
    Mr. WYNNE. I would like to see better utilization of the 
test sites but I think it depends on what we are trying to get 
done. I think the challenge that we have got today is that we 
have only been talking about things essentially that are pretty 
low complexity types of operations. There are lots of things 
that can be done with this technology that are highly complex 
and we are sort of in a walk, jog, run situation. What we are 
encouraging the FAA, while they are finishing and finalizing 
the rules that are very low risk for under 500 feet, visual 
line of sight, daytime operations, et cetera, that they start 
looking at things beyond visual line of sight, extended line of 
sight. Operating under a bridge could actually be a beyond 
visual line-of-sight operation. That would require safety 
standards, if you will, that can only be set and can only be 
agreed to if they have been researched to the FAA's 
satisfaction. I think the test sites are an opportunity to do 
that.
    Mr. KNIGHT. And Mr. Wynne, I am going to ask you my final 
question because it seems like you are a pilot.
    On the larger UAS--and most of the UAS are under 40 or 50 
pounds. I think that is probably 80 percent of the UAS in 
America are about that size--but the larger ones that are in 
the military, do you see that we need to change our kind of 
see-and-avoid process under 18,000 feet with chase planes, 
things like that? Do you think that we have gotten to a point 
that we can do those things and be in a safe arena for the rest 
of the air traffic?
    Mr. WYNNE. That is being determined now, and that is a good 
example of what I am talking about. The military has figured 
out how to safely operate manned and unmanned systems in 
theater together without incident, and in some cases, very 
cooperatively. So we can learn from them. They have real clear 
standards that can be adopted for the national airspace system. 
There are organizations that are working on that, including 
NASA. The FAA is participating in that process, and those are 
good examples of how we need to test things to everyone's 
satisfaction, set those rules, and go forward from there.
    Mr. KNIGHT. Thank you very much.
    Chairman CHABOT. The gentleman's time is expired.
    Mr. KNIGHT. I yield back.
    Chairman CHABOT. Thank you.
    If Ms. Clarke would not mind, before I call on her, the 
Wright Brothers were mentioned again, so I will just tell 
something I think is kind of interesting. Every state has two 
statues that are in the Capitol Building, most of them in the 
statutory hall. Ohio has President James Garfield and a fellow 
named Allen, who was a congressman, a senator, and a governor, 
and he was also a racist. It was during slavery times, and so 
he is being removed, and there was a contest. People in Ohio 
were asked who we wanted to replace him with, and the people 
who came in second were the Wright Brothers. And the one who 
won was Thomas Edison. So in the very near future you will see 
Thomas Edison's statue over there. Was that not interesting?
    The gentlelady from New York, Ms. Clarke is recognized for 
five minutes.
    Ms. CLARKE. A bit of trivia, Mr. Chairman.
    Thank you, Mr. Chairman, and I thank our ranking member. I 
thank our panelists for taking the time to share your expertise 
with us today, and I would like to also welcome my fellow 
Brooklynite, Mr. Streem. Thank you for attending today's 
hearing.
    I am fascinated by the advancements in UAS technology. The 
fact that we have entered the age of technologically advanced 
use of unmanned aircraft is very encouraging. Unmanned systems 
hold the potential to truly revolutionize our economy and way 
of life in this country in such areas as agriculture, news 
coverage, inspections, surveillance, data collection, mapping, 
and surveying photo, video, film production, and many other 
services.
    However, I also believe that we must address unanswered 
questions that this new technology brings to the forefront of 
safety in America's skies. We must address the issues of 
authority, privacy, accountability, and transparency. It was 
interesting to hear how this technology has developed over the 
years and its potential as a growth industry and what we can do 
to assure that we can facilitate drone use in American airspace 
while keeping all forms of air travel and ensure privacy for 
all people.
    Having said that, Dr. McLain, when you speak of being able 
to go beyond line of sight for certain industries, my question 
is, how do we control and stabilize the aircraft beyond what 
our eyes can see, and what technology would need to be in place 
to ensure that we have control of the aircraft at all times 
given the challenges of cybersecurity and the liability 
inherent in commercial use?
    Mr. MCLAIN. So that is a good question.
    I think there are several technologies that can be brought 
to bear to enable beyond-line-of-sight flight. The control of 
the aircraft, or the stability of the aircraft, technology 
exists to do that. Current autopilot technology makes that 
possible, and of course, it is used in military applications 
all the time.
    You bring up the security of communications links. I think 
it is fair to say that most of the communication links used in 
commercial UAS applications, and even in some military 
applications, are not as secure as they could be. So there 
might need to be technology applied to make those communication 
links as they extend, especially beyond line of sight, secure.
    Other technology that could be brought to bear is sense-
and-avoid or detect-and-avoid technology, which would allow the 
aircraft to detect other aircraft in the airspace and to take 
appropriate measures to avoid other aircraft as they were 
encroaching. There is a variety of ways to do that. The NextGen 
system that is being proposed by the FAA utilizes ADSB to 
communicate the locations of all the aircraft in the airspace 
and that could be used for unmanned aircraft. Certainly, most 
robust would be to have the capability of each aircraft to 
detect the other aircraft in the air what we call 
noncooperatively. So they can do it without the cooperation of 
any network system or something like that. And in that case 
they would be probably using radar or machine vision sorts of 
techniques to detect the other aircraft.
    Ms. CLARKE. And the issue of liability, I raise that 
because baking in cybersecurity measures and liability now 
increases the cost of actually operating for a small business 
owner. Do you see this as being sort of undercutting the 
industry or just a necessity?
    Mr. WYNNE. I think for certain applications, the 
cybersecurity or the security of the communications link might 
be vital. There might be other applications where, whether it 
is due to the location of the flight and the lack of populated 
areas and so forth where it may not be necessary.
    Ms. CLARKE. Very well.
    Mr. Streem, what measures are your company taking 
specifically to ensure safety of not only your UAS, but 
aircraft in the skies that might be flying in the spaces where 
you are filming?
    Mr. STREEM. Sure. I mean, we have operating procedures that 
have been approved by the FAA. We cannot go above 400 feet. We 
have to file a COA. We have to file a NOTAM that pretty much 
notifies any other aircraft where we are, what we are doing. 
When it comes to a film shoot, the people on the ground are 
very well aware. There is typically a director and then there 
is a first AD, which is an assistant director. And that AD is 
in charge of saying, ``Okay, there is going to be a car that is 
going to go over a ramp and it is going to explode. Everybody 
look out for the explosion.'' In this case it is, ``There is 
going to be a drone flying in the sky. It is going to do this. 
Know about that.''
    Ms. VELAZQUEZ. I yield back. Thank you, Mr. Chairman.
    Chairman CHABOT. Thank you very much. The gentlelady's time 
is expired.
    The gentleman from New York, Mr. Hanna, who is the chairman 
of the Subcommittee on Contracting and Workforce, is recognized 
for five minutes.
    Mr. HANNA. Thank you. I am also a pilot. I am on the FAA 
Subcommittee, and I have the privilege to represent Griffiss 
Air Park, which is one of the six sites, so I would invite you 
all to come and visit and look around. It is a great place. 
Thirteen thousand feet of runway and a solid four seasons.
    Mr. Wynne, and everyone, one of the problems I have with 
all of this is UAVs are not new. They have been around the 
world for 20 years. Japan has been using in agriculture for at 
least that long. Other countries have. This is a known 
quantity, and yet the FAA, as you pointed out, nine years 
behind on their rulemaking. So my feeling is a lot of this is 
we are blaming the victim because in this case all of you are 
so far ahead of the FAA in your development, in your needs, 
your usage, your opportunities to grow your businesses which 
you have all explained so beautifully. So the kind of 
underlying statement I hear is that a common--maybe with the 
exception is Mr. Wynne--complaint about the FAA in the process. 
And things like line of sight, which frankly do not work are 
practical. Licensing. You know, they backed away from wanting 
to use people with not just VFR but IFR licenses, all those 
kinds of silly things.
    And I guess I would like to ask your opinion about the 
process. I know there have been lawsuits the FAA lost. And the 
loss, was it against you, Mr. Streem? You remember that. It 
went to the court. The FAA lost jurisdiction because they 
abrogated the opportunity to make rules, and so they said this 
is not for you.
    I want, anybody, talk about the FAA and the urgency that, 
apparently their desire to keep things safe is overwhelming 
their ability to get their work done. What do you think of 
that?
    Mr. STREEM. Yeah. I would like to say a few words on that.
    We feel that the FAA, really it needs to take a risk-based 
approach to the regulations, and we are a big advocate of a 
concept that has been discussed, which is a micro UAS rule. So 
for small aircraft like ours under 4.4 pounds. We are in a 
different risk category entirely in terms of operations, and we 
are being held to the same standard now as these bigger, 
larger, more risky aircraft. And so it is a big challenge to us 
to get through the red tape and the extra cost and to live with 
some of the limitations that we do not feel are warranted for 
our class of operation.
    Mr. HANNA. The 174th flies predator drones between 
Syracuse, New York and Griffiss. They are going to start, I 
think, this month, with a manned plane following. Do you want 
to talk about this, Mr. Wynne? I mean, you seem more supportive 
of the FAA than the others, but maybe I am just imagining that.
    Mr. WYNNE. You are imagining it, Congressman.
    Mr. HANNA. Good, good.
    Mr. WYNNE. No, I do not mean to be disrespectful to you. We 
are the FAA. The bottom line is that I have promoted 
technologies that meet regulations my entire career and I have 
never seen a bureaucracy keep up with technology. It just does 
not happen.
    Mr. HANNA. It does not happen here. Apparently, it happens 
other places.
    Mr. WYNNE. Well, I think----
    Mr. HANNA. We talk about next generation aviation. There 
are 20 other countries that have it.
    Mr. WYNNE. You are right. And I think, you know, as long as 
we are focusing on the risk associated with the operation, we 
will be fine. I mean, the idea of an instrument-rated pilot 
having to keep up those kinds of requirements in order to fly 
under a bridge, even in a beyond visual line-of-sight 
circumstance, the risk there is actually very low, so we want 
to be focusing on the risk rather than the platform. If we are 
flying in Class A airspace above 18,000 feet, that is a 
different matter. That requires understanding commercial rules, 
et cetera, et cetera. So I think it really is a function of 
getting the FAA to understand this is not a system--you cannot 
apply a platform-based system.
    Mr. HANNA. So you would agree with Mr. Gilkey then that 
they are just not using a risk approach that is practical in 
our world?
    Mr. WYNNE. I think we are moving in that direction. I see 
elements of that in removing--in basically saying under 500 
feet, visual line of sight, you are basically able to fly with 
a knowledge-based test. That was a step forward. Not 
necessarily a great step forward, but now we need to know what 
knowledge-based means. And it gets back to some of the 
challenges that we have had where we do have people flying that 
do not have any knowledge. And so I think somehow we need to 
find a way to meet them in the middle.
    Mr. HANNA. My time is expired. Thank you very much.
    Chairman CHABOT. Thank you. The gentleman's time has 
expired.
    The gentleman from Nevada, Mr. Hardy, who is the chairman 
of the Subcommittee on Investigations, Oversight, and 
Regulations, is recognized for five minutes.
    Mr. HARDY. Thank you, Mr. Chair.
    I kind of want to continue down some of the same lines that 
my colleague, Mr. Hanna, was going. We talk about how long this 
has taken, this process. We talk about education here today. 
But it seems like in this place here on the Hill that we have a 
way of--we want somehow a ``one size fits all'' unless it comes 
to something new. Then we want to make sure that you get some 
new regulations, you get some new oversight.
    In the industry that I am in, and I have been all my life, 
insurance aspects. You know what? In order to have something or 
do something in my business, sell it even, you have to have 
liability insurance before you can get it.
    Why are we reinventing the wheel? Does that seem like a 
logical thing that we just--if we are going to buy something, 
purchase something, you should have to be in the same aspects 
as all other business people utilizing it, not because you 
cannot afford it and the risk.
    The other question I would ask is does it seem like things 
like the knowledge part of this, you know, in my industry, 
there is a lot out there nationally. ``Call before you dig.'' 
You know, in my business, ignorance is not a sign of innocence. 
You go to jail, you get paid, you pay your fines. Somebody out 
there flying around in restricted airspace or doing things 
without that--does anybody care to comment on that thought 
process and why it takes us so long to get things done in this 
place every time we turn around? I will take anybody's----
    Mr. MCLAIN. Initially, I think part of the problem is that 
the FAA pursued a ``one size fits all'' solution to aircraft in 
the airspace, and while that makes sense for manned aircraft, I 
think, it does not make sense for unmanned aircraft where the 
spectrum of sizes and relative risk from the micro UAVs that we 
are seeing here or to the Predators or Global Hawks, there is 
such a broad spectrum that it does not make sense to regulate 
them all with the same rule.
    Mr. WYNNE. AUVSI is standing up an insurance program for 
UAS operators, so we are getting into that business. We are 
encouraging underwriters to come in and understand what is 
going on. Fundamentally, we are just at the cusp of this, and 
although Mr. Hanna pointed out that the technology has been 
around for some time, in some ways the insurance world is just 
understanding how. What is the risk associated with flying as a 
real estate agent versus flying as a construction person, et 
cetera, et cetera? There are a lot of different applications. I 
personally think that normal business rules are ultimately 
going to apply here. The insurance companies require certain 
things for flying an airplane that the FAA does not require. 
You know single engine land is single engine land. I could fly 
an airplane as a pilot but, you know, if the airplane has 
retractable gear, the insurance company is going to require you 
to do dual time with an instructor because they do not want you 
to land with the gear up kind of thing.
    So the insurance companies will actually come along, I 
think, in this instance, and we are hearing that from the 
underwriters as we stand up this program. And they will 
basically come up with solutions and understand, what are the 
additional requirements that we need to put in place so that we 
can insure you at an appropriate premium?
    Mr. HARDY. I would like to take a little bit different 
direction.
    My district, I represent--Nellis Air Force Base is in my 
district and the Nellis test range. I have talked to the folks 
out at the base. Today, they are not worried too much about it, 
but as progression goes on and we are one of those sites 
selected, and they worry. There is top secret information out 
there, that as things are able to go higher, they get more 
ability, that maybe some of that secrecy may not be available. 
Is there anything we can do to stop--assure that will never 
happen as being one of our testing areas? Not really. We will 
just say not really. But it is a question that needs to be 
answered.
    Is my time over?
    Anyway, one of the other issues that is big for our area 
and I want to confirm it again that the science is there, as 
you may or may not know, the Creech Air Force Base is in the 
test range. Most of those drone strikes that we have that we 
read about are from Creech on sites over 11,000 miles away. So 
the technology is there to fly that unmanned vehicle without 
somebody being able to see it because I do not think anybody 
can see from 11,000 miles away. But does the private sector 
have the ability to have that same technology today?
    Mr. MCLAIN. Absolutely. It is not military grade perhaps 
but the fundamental technology of flying beyond line of sight 
exists and it is not--it is well within reach of small 
business.
    Mr. HARDY. Thank you. I believe my time is expired.
    Chairman CHABOT. Thank you. The gentleman's time is 
expired.
    The gentlelady from American Samoa, Ms. Radewagen, is 
recognized. She is the Subcommittee chairman on Health and 
Technology.
    Ms. RADEWAGEN. Thank you, Mr. Chairman.
    Mr. Gilkey, in your written testimony, you noted that state 
and local governments are establishing an inconsistent 
patchwork of operating restrictions that will be difficult for 
small businesses to navigate. Can you elaborate on why state 
and local operating restrictions are a challenge for small UAS 
operators?
    Mr. GILKEY. Certainly. Again, we feel a number of these 
cases are motivated by reactionary public sentiment and not 
necessarily well founded on risk-based analysis, but to a small 
business, it is a real challenge financially and in terms of 
resources to get educated at every potential location that we 
might want to operate, what the local rules are. We are very 
much interested in uniform rules that we can apply nationwide. 
Now, that said, there are instances, like in the national 
capital region, where that is a no fly zone for drones, 
understandably. So there are site-specific exemptions that have 
to be implemented. We would like to see those vetted at a 
federal level to make sure that proper standards are applied 
and that the communication of those restrictions is easy to 
access. So annotations on aeronautical charts, for example, or 
NOTAM filings, or things that are readily accessible that we 
could educate ourselves quickly on what those regulations are, 
those restrictions.
    Ms. RADEWAGEN. Let me follow up.
    What sort of issues do you foresee in developing a standard 
across all states, including the outlying territories, who 
often have their own rules and regulations in regards to flight 
operations?
    Mr. Gilkey, follow-up question to you, sir.
    Mr. GILKEY. Well, as a small business, we have to make 
decisions every day on how to deploy our capital and our 
equipment and resources. So we will gravitate to areas where it 
is easier and more accommodating for us to do business. And my 
fear with the state and local restrictions is that it is going 
to create a situation of haves and have-nots as far as folks 
who can reap the benefits of the technology that we have to 
offer and my colleagues and those who cannot.
    Ms. RADEWAGEN. Thank you.
    And for Dr. McLain, you mentioned that the FAA's Pathfinder 
Program, which is a collaborative effort between FAA and 
industry partners to research different types of operations 
including extended visual line-of-sight operations in rural 
areas, what is the benefit of this type of collaborative 
research-type program?
    Mr. MCLAIN. Well, it is an opportunity to test and try out 
applications under, I guess, more restrictive test conditions 
in the sense that, for example, in surveying the railroad track 
in New Mexico, one of the applications I believe that is being 
considered here is it is done where the airspace is restricted 
and there is not any probability of having accidents or the 
probabilities are certainly lowered by restricting the airspace 
and access to that airspace. So these are experimental 
demonstrations of the technology proving out that they can be 
done safely.
    Ms. RADEWAGEN. Dr. McLain, does this research program 
extend to the United States territories as well?
    Mr. MCLAIN. I am not aware of any activities in the 
territories outside of the United States.
    Ms. RADEWAGEN. Why not?
    Mr. MCLAIN. Oh, I do not think there is any reason that it 
could not.
    Ms. RADEWAGEN. Thank you, Mr. Chairman. I yield back.
    Chairman CHABOT. Thank you very much. The gentlelady yields 
back.
    The gentlelady from Michigan, Ms. Lawrence, is recognized 
for five minutes.
    Ms. LAWRENCE. Thank you, Chairman.
    First of all, being from Michigan, I wanted to recognize 
Aerius Flight LLC which was the first company in my state to 
get FAA approval of commercial application for drone 
photography and video graphics.
    Mr. Wynne, according to an industry survey, videography and 
cinema is expected to comprise 41 percent of the market by the 
use of drones by small businesses. What other types of small 
businesses do you anticipate using the unmanned aircraft in the 
next five to 10 years?
    Mr. WYNNE. That list would take us most of the afternoon.
    Ms. LAWRENCE. Oh, okay.
    Mr. WYNNE. Happily. I think what we are seeing, we are in 
the process of looking and analyzing the Section 333 
applications to date, and a very, very large percentage are 
small business, beginning with real estate, insurance folks. 
Obviously, wedding photographers across the board to the kind 
of services that Mr. Streem offers, because you can again use 
these platforms to put lots of different things on them, 
cameras being the most obvious for all of us.
    So I think there is almost an unlimited number of small 
business that can take advantage of this. Agriculture is a big 
chunk of what we see going forward as well. And of course, 
agriculture, there is large agriculture, but the vast majority 
of farmers are small business people, and in many instances, 
that is a good example of a low-risk operation that might even 
be beyond visual line of sight where a farmer is surveying 
their crops over a hill, again, over their own property, and 
very safely with various procedures in place if say a 
helicopter came into the area, things like that.
    Hopefully that answers your question, ma'am.
    Ms. LAWRENCE. Yes. You went into my next question, which is 
regarding the farmers and restrictions. As we look at all the 
industries or small businesses that can spin off from this 
industry, there are some real concerns about--you talked about 
a challenge, which was line of sight, but there also has been a 
lot of issues, and I serve on Oversight, about regulation. What 
type of restrictions should I put as a government on this 
industry based on my privacy rights, based on my opting out of 
maybe a delivery? There is a big issue about package delivery. 
Maybe I do not want you to come drop a box on my porch. What 
are some of the restrictions that you are hearing as these 
small businesses are looking at implementing this that we 
should have on our radar as an oversight government that will 
be sensitive to businesses growing in this industry?
    Mr. WYNNE. I guess my overall context would be let us not 
have solutions looking for problems. All of the laws that 
pertain to nuisance or privacy pertain to these platforms. So I 
think that is, you know, Fourth Amendment rights are Fourth 
Amendment rights no matter what the platform is, whether it is 
a manned helicopter or UAS. So I think that would be my first 
point.
    The second point is that as an industry, we are permitted 
to safe and responsible use of the technology. We are not going 
to be able to optimize this opportunity for the country without 
a sustained growth in utilization of the systems. And you have 
some small businesses here. We have many, many industries that 
are coming to us saying our constituents would like to use this 
technology both for small business and large to optimize and to 
increase the profitability of our operations. I think we should 
see how that goes before we start trying to anticipate every 
single problem that comes along, recognizing that the industry 
will be committed to addressing these problems as they emerge, 
otherwise, we will not have a sustainable business going 
forward.
    Ms. LAWRENCE. Thank you so much, and I yield back my time.
    Chairman CHABOT. Thank you very much. The gentlelady yields 
back.
    And we want to thank the panel for their very interesting 
and timely testimony here this morning and then now into this 
afternoon. I think the potential uses of commercial unmanned 
aircraft systems is virtually limitless and there obviously is 
a role for government to play in this, and that is going to 
slow things down. It always does. And so we will certainly 
encourage the FAA to get off the dime here to protect the 
rights of the public, but at the same time not be an 
obstruction to what could create potentially a huge number of 
jobs, and we certainly need to move in that direction in this 
country.
    So again, thank you very much. We appreciate your 
testimony.
    I would ask unanimous consent that members have five 
legislative days to submit statements and supporting materials 
for the record.
    And if there is no further business to come before the 
Committee, we are adjourned. Thank you very much.
    [Whereupon, at 12:14 p.m., the Committee was adjourned.]
                            A P P E N D I X

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Chairman Chabot, Ranking Member Velazquez and members of 
the committee, thank you very much for the opportunity to 
participate in today's hearing on unmanned aircraft systems. I 
am speaking on behalf of the Association for Unmanned Vehicle 
Systems International (AUVSI), the world's largest non-profit 
organization devoted exclusively to advancing the unmanned 
systems and robotics community. AUVSI has been the voice of 
unmanned systems for more than 40 years, and currently we have 
more than 7,500 members, including many small business members 
that support and supply this high-tech industry.

    UAS increase human potential, allowing us to execute 
dangerous or difficult tasks safely and efficiency. From 
inspecting pipelines and surveying bridges to filming movies 
and providing farmers with aerial views of their crops, the 
applications of UAS are virtually limitless and offer a 
superior way to see what needs to be seen, in less time and at 
less expense. It's no wonder businesses--small and large--are 
clamoring to use this technology.

    For years, AUVSI has been a leading advocate for the safe 
integration of unmanned aircraft into the U.S. National 
Airspace System (NAS). We were delighted earlier this year when 
the Federal Aviation Administration published its long awaited 
proposed rules for the commercial and civil operations of small 
UAS (systems that weigh 55 pounds or less).\1\ These proposed 
rules are a critical milestone in the UAS integration process 
and bring us closer to realizing the tremendous societal and 
economic benefits this technology offers.
---------------------------------------------------------------------------
    \1\ https://www.faa.gov/uas/nprm/

    Indeed, as the FAA has worked on these rules, much has 
already changed in the industry. Since Congress tasked the FAA 
with creating UAS regulations in 2012, the technology has gone 
from a specialized tool to a must-have business asset. The 
flood of commercial exemption requests to the FAA, in 
particular, shows that a mature UAS commercial market is 
---------------------------------------------------------------------------
waiting to be unleashed.

    In May 2014, the agency announced it would consider 
granting exemptions for certain low-risk commercial UAS 
applications under Section 333 of the FAA Modernization and 
Reform Act of 2012. Since then, the FAA has received more than 
2,000 requests \2\ and granted more than 700 \3\ exemptions to 
businesses looking to use UAS for precision agriculture; 
inspecting infrastructure; mapping and surveying; film, photo 
and video production; public safety or emergency response; and 
environmental inspection and regulation.
---------------------------------------------------------------------------
    \2\ http://www.regulations.gov/
#lsearchResults;rpp=25;po=0;s=%2522section%2528333%2522%252BFAA;fp=true;
ns=true
    \3\ https://www.faa.gov/uas/legislative--programs/
section--333/

    Many of these exemptions illustrate the sweeping impact the 
industry is having on small businesses. AUVSI has looked at the 
first several hundred exemptions that have been granted; and 
according to our analysis, the vast majority of businesses 
receiving exemptions are small businesses. Just as smartphones 
and tablets revolutionized our economy over the past decade, 
UAS are transforming the way a number of industries operate, 
and are creating several new ones as well--from startups 
focused on developing new UAS platforms and components to 
entrepreneurs creating new business models that offer specific 
UAS services. Other small businesses are eager to use UAS to 
---------------------------------------------------------------------------
improve their existing services and extend their capabilities.

    Let me provide just a few examples:

           North Carolina-based PrecisionHawk is a 
        startup that manufactures UAS and cloud-based data 
        collection software. Its UAS platform, the Lancaster, 
        is helping farmers survey crops and assisting insurance 
        companies with claims following natural disasters. The 
        company received a Section 333 exemption to fly its 
        platform commercially in the U.S., and a number of its 
        clients have also received exemptions, including AIG 
        and USAA. PrecisionHawk was also one of three companies 
        selected to kickoff the FAA's Pathfinder Program.\4\ 
        The company will help the FAA and industry research 
        extended visual line-of-sight operations in rural 
        areas. Founded in 2010, PrecisionHawk started with six 
        employees and has now grown to more than 70 employees, 
        with multiple offices in the U.S. plus offices in 
        Canada, India and the United Kingdom.\5\
---------------------------------------------------------------------------
    \4\ http://www.faa.gov/news/press--releases/
news--story.cfm?newsld=18756
    \5\ http://www.precisionhawk.com/

           Another example is Southern California-based 
        Aerial Mob. The company was one of the first to receive 
        a commercial exemption from the FAA.\6\ An innovator in 
        UAS cinematography and technology, Aerial Mob is 
        considered a pioneer in the development of UAS safety 
        standards by the Motion Picture Association of America 
        and the FAA. It performed the first ever FAA approved 
        film production project with a major studio, Warner 
        Brothers, on the set of the CBS TV show ``The 
        Mentalist.'' \7\ The company has since filmed Super 
        Bowl promos for NBC, a promo for a new show on Amazon 
        Prime, and even helped Apple film a commercial.
---------------------------------------------------------------------------
    \6\ http://www.faa/gov/news/press--releases/
news--story.cfm?cid=TW251&newsld=17194
    \7\ http://finance.yahoo.com/news/warner-bros-uses-drone-on--the-
mentalist--set--a-hollywood-first-144435648.html

           Then there is Douglas Trudeau. Based in 
        Tucson, Arizona, Mr. Trudeau was the first Realtor to 
        apply for, and receive, a Section 333 waiver from the 
        FAA to use UAS in his real estate business.\8\ A 
        Realtor for 15 years, Mr. Trudeau saw an opportunity to 
        capture unique aerial perspectives for his listings--
        images that he couldn't obtain from the ground. Mr. 
        Trudeau now offers a how-to guide on his website for 
        other real estate agents interested in applying for 
        exemptions, and he is also a sought-after speaker.\9\ 
        Since Mr. Trudeau received his exemption in January 
        this year, the FAA has issued waivers to more than 200 
        real estate-related companies, according to the 
        National Association of Realtors.\10\
---------------------------------------------------------------------------
    \8\ http://www.nwitimes.com/lifestyles/hone-and-garden/drones-the-
next-frontier-in-real-estate-marketing/article--829bd032-
10cb-518f-aee6-ff092e519a82.html
    \9\ Ibid.
    \10\ http://www.realtor.org/articles/updated-list-of-faa-approved-
drone-operators-available-on-realtororg

    These are just a few examples of the real-world, small 
---------------------------------------------------------------------------
business applications of UAS. And there are many, many more.

    The FAA continues to approve about 50 new commercial 
operations a week, a process that has been recently streamlined 
and expedited. However, this current system of case-by-case 
approvals--whether streamlined or not--isn't a long-term 
solution for the many small businesses wanting to fly. In 
addition, the requirements for UAS operators are generally more 
onerous under the section 333 exemption process than the 
operator requirements contemplated in the draft UAS rules. It's 
our view that a Realtor or a wedding photographer who wants to 
fly a lightweight platform for aerial photography shouldn't 
have to master stalls in a manned aircraft or learn how to land 
a 2,000 pound Cessna.

    As an industry, we want to see the integration of UAS 
proceed and without any further delays. Once this happens, we 
will have an established framework for UAS operations that will 
allow anyone who follows the rules to fly. It will do away with 
the case-by-case system of approvals that currently exists, 
reducing the barriers to UAS operations. And importantly, the 
integration will establish rules for the commercial use of UAS 
so that small businesses from every industry sector can take 
advantage of this innovative technology.

    Given the technology's potential, it is important that the 
FAA finalize the small UAS rules as quickly as possible. 
Moreover, Congress needs to pass--and the President needs to 
sign into law--an FAA reauthorization measure before the 
current authorization expires on September 30, 2015.

    This measure is critical for accelerating and expanding the 
commercial use of UAS and the most immediate way to encourage 
additional collaborative innovation between the numerous 
governmental and private sector stakeholders. AUVSI has been 
engaged with the committees and staffs leading the FAA 
reauthorization efforts in both chambers of Congress to address 
specific recommendations on how this can be accomplished.

    Equally as important, government and industry need to work 
together to permit expanded uses of UAS technology that pose no 
additional risk to the airspace system. For example, whether 
within the context of the rule, through the FAA reauthorization 
measure or by other means, we need to allow for beyond-visual-
line-of-sight, nighttime operations and operations over heavily 
populated areas. Otherwise we risk stunting a still-nascent 
industry, and restricting the many beneficial uses of this 
technology.

    It's not just the many uses of this technology that are at 
stake, but also the 100,000 jobs and $82 billion in economic 
impact that the UAS industry is expected to create in its first 
decade following integration.\11\ With the right regulatory 
environment, there's no question these numbers could go higher. 
The benefits of this technology are broad, and we need to make 
sure we are doing all we can to support its growth and 
development. But the longer we take, the more our nation risks 
losing its innovation edge along with billions in economic 
impact.
---------------------------------------------------------------------------
    \11\ http://www.auvsi.org/econreport

    UAS technology is at an exciting and pivotal stage. The 
technology is developing rapidly, with new applications being 
highlighted nearly every day, much faster than our country's 
capacity to develop the necessary regulations. We need to make 
sure that the FAA adopts the proper framework to keep up with 
this technology and is sufficiently resourced to work with 
industry stakeholders to perform essential research ensuring 
---------------------------------------------------------------------------
the safety of our airspace.

    Thank you again for the opportunity to speak today. I look 
forward to answering any questions the committee might have.
                          Testimony of

                     Michael J. Gilkey, CEO

                    3D Aerial Solutions, LLC

                           Before the

                 U.S. House of Representatives

                  Committee on Small Business

                           Hearing on

Taking Flight: Small Business Utilization of Unmanned Aircraft.

                         July 15, 2015

    Good morning Chairman Chabot, Ranking Member Velazquez and 
Members of the Committee. It's a pleasure to be here today to 
discuss an entrepreneur's perspective on the emerging unmanned 
aircraft systems industry.

    Opening Comments

    Unmanned systems hold the potential to truly revolutionize 
our economy and way of life in the United States. Unmanned 
Aircraft Systems, or UAS, provide innovative new tools to the 
common man, which are being employed in uncommon ways. A new 
industry is being born resulting in the creation of many new 
small businesses.

    UAS enjoy wide coverage in the media. However, much of it 
is negative due to the irresponsible behavior of those who 
don't know or don't follow the rules. All of us in this 
industry are genuinely concerned about the proper use of UAS 
and want to see violators dealt with comprehensively and 
effectively. We understand and appreciate the need for rules.

    However, the highly restricted nature of the current 
interim rules and the slow pace of permanent rulemaking 
continue to stifle the ability of small business to capitalize 
on this market's potential. Furthermore, the lack of permanent, 
uniform rules is spurring state and local governments to 
establish their own restrictions that are creating an 
inconsistent patchwork that will be difficult for small 
business to navigate.

    Small business people like me are slugging their way 
through the obstacles and bureaucracy to fulfill our dreams of 
creating this new industry. We are pioneers, determined to 
succeed and believe the country and world will be 
beneficiaries. I welcome the opportunity to be here today to 
inform the Committee of our story and explore how Congress can 
foster a more accommodating environment for small business, 
which also ensures safe operations and protects privacy.

    Creating a Startup UAS Company

    My colleagues and I created 3D Aerial Solutions, LLC in 
2013 to leverage our expertise working with military unmanned 
aircraft and transition advanced technology know-how to solve 
civilian problems. We focus on applications that utilize:

           Automated flight planning and aircraft 
        control
           Automated sensor control and data processing
           Advanced man-machine interfaces

    We self-funded 3D Aerial through an initial round of owner-
investment and began buying aircraft and equipment. We 
purchased a senseFly eBee aircraft because it is highly 
automated, easy to use, and precise. We are now a sales agent 
for this product line. We began flying under Academy of Model 
Aeronautics (AMA) `hobbyist' rules and became experts on this 
equipment.

    3D Aerial became an affiliate member of The Entrepreneur's 
Center, a technology business incubator in Dayton, OH, to gain 
access to business advice and meeting facilities. This is 
proving to be a positive relationship from which we are pursing 
additional investment funding for capital investment and 
business expansion.

    Well-intentioned state economic development funding is now 
being deployed to help foster the creation of new businesses in 
my area, and includes a special interest in the UAS industry. 
However, it appears to be directed primarily to public colleges 
and universities and has been of no benefit to the startup of 
private companies like 3D Aerial Solutions.

    Getting our Wings

    Despite owning aircraft we were expert at flying, our small 
private business was not eligible to apply for a Certificate of 
Authorization (COA) in order to fly commercially. We were 
limited to demonstration flights and we began marketing future 
projects with no idea when we would be allowed to perform them.

    3D Aerial believes we in the UAS industry have a 
responsibility to reach out and educate the public of the 
benefits and restrictions associated with responsible UAS 
operation. To this end, we started the Dayton Drone Users Group 
for community outreach and completed a volunteer community 
service project, producing a promotional video for a local YMCA 
camp.

    We collaborated with the Ohio/Indiana UAS Center and Test 
Complex and were able to fly on a COA they established. For the 
most part, however, we spent a year and a half in a holding 
pattern awaiting authority to make money flying unmanned 
aircraft.

    3D Aerial submitted our request for a FAA Modernization and 
Reform Act of 2012 (Pub. L. 112-95) Section 333 Exemption on 
October 14 2014. We received and responded to a FAA's request 
for information in February and were granted an exemption on 
March 3, 2015. We were the 2nd company in Ohio to be granted a 
Section 333 exemption.

    3D Aerial received the corresponding COA on March 23. It 
took over a month to get the registration for our eBee aircraft 
from the FAA, which came May 7th. With these steps complete, we 
are now authorized to legally perform commercial flying 
services, limited to only flights of the eBee aircraft and only 
for the agricultural applications that we requested. The 
blanket COA allows us to operate throughout the United States 
but is subject to a large number of significant restrictions.

    Benefits of UAS to Agriculture

    Precision Agriculture is an information and technology-
based agricultural management system used to identify, analyze 
and manage variability within fields for optimum profitability, 
sustainability and environmental protection (ref. USDA web 
site). These practices allow producers to determine precisely 
what their needs are for fertilizer, herbicide insecticide and 
water at every point throughout a field. Modern farm equipment 
allows them to apply exactly the prescribed amounts at the 
required location to maximize yield. This saves farmers money, 
maximizes yield reduces environmental risk from over 
application of unnecessary chemicals.

    Aerial imaging using satellites and manned aircraft has 
been used for years in agriculture to augment on the ground 
techniques of soil sampling and crop scouting to support 
precision agriculture. Field techniques are highly accurate, 
but are labor intensive, time consuming and result in limited 
sampling. Aerial imaging offers greater coverage by sampling 
every point in the field at the camera's image resolution. 
Small UAS like our eBee can fly much lower than manned aircraft 
and can offer extremely high image resolution (to less than 1 
inch per image pixel). They can also operate very inexpensively 
and virtually ``on-demand''.

    What the Images Tell You

    The images record reflected sunlight at different 
wavelengths, or `colors'. Different cameras are used to collect 
in different spectral bands (i.e. visible, near infrared and 
thermal infrared) to provide a variety of techniques for 
analysis. Multispectral cameras efficiently collect multiple 
colors simultaneously.

    Early in the season, farmers may be imaging to perform 
plant counting, so areas that don't initiate can be replanted. 
Throughout the season, producers are looking for things like 
chlorophyll indication, plant stress, and moisture analysis. 
These conditions and more can be detected and localized in the 
field through the proper processing of aerial imagery using the 
various colors.

    Collected images are ortho-rectified and geo-registered so 
each point in an image can be tied to its corresponding 
location on the ground. Image processing software stitches 
these images together into high-resolution, wide area `maps' 
called orthomosaics. Also, 3 dimensional point clouds can be 
extracted through triangulation processing. Image analysis 
software applies algorithms to compute vegetation indices and 
other health metrics. These can be used to create treatments to 
address various crop health problems. These prescriptions can 
be turned into a geographic `shapefile' and loaded onto farm 
equipment for precision application of nutrients, etc.

    3D Aerial is now providing UAS flight services to perform 
aerial imaging of crops using the eBee. We also process the 
imagery into the desired image products, which are provided to 
the farmer. We are in the process of hiring more pilots and 
buying more aircraft.

    Permanent Rules

    The FAA has stepped up the issuance of the Section 333 
exemptions and 714 exemptions approved as of the end of June 
2015 (ref: Bloomberg News).

    The FAA issued its Notice of Proposed Rule Making (NPRM) 
for Operation and Certification of Small UAS on February 23, 
2015. Implementation of final rules is not expected until mid 
2016 at the earliest. While there are still many restrictions, 
the current rules as proposed will represent a big step forward 
for the small UAS industry.

    Positive aspects:

           Pilot certification requirements are 
        reduced. A full private pilot's license is not 
        required.
           No FAA airworthiness certification required.
           Aircraft performance limits accommodate 
        operating range. These will foster broad range of 
        commercial UAS applications.
           Most of the remaining requirements are 
        similar to what we operate under now.

    3D Aerial's concerns as a small business operator:

           Cost to gain FAA operator certification. The 
        NRPM's Regulatory Flexibility Determination estimates 
        that out of pocket costs for small UAS operator to be 
        FAA certified is less than $300. This estimate appears 
        quite low. Specific training and testing requirements 
        are currently unknown.
           Phase in period for compliance with the new 
        rules. Will currently approved operators (with private 
        pilots with 2nd class medical certificates) be suddenly 
        ineligible to perform their duties until new 
        certification requirements are met?
           Impact of state and local rules restricting 
        UAS operations. Will our small business be forced to 
        learn and comply with a wide variety of rules that 
        change state-by-state and city-by-city?
           Enforcement of regulations. Will FAA have 
        the ability to prevent UAS businesses that don't have 
        the certifications and don't follow the rules from 
        operating and undercutting business from those of us 
        who do?

    In Summary

    It's exciting to be on the ground floor of the emerging 
commercial small UAS industry. If fostered through a reasonable 
balance of regulations to protect the national airspace and 
accommodating economic policy, small businesses will be a 
significant engine of growth, delivering on the promise of new 
jobs and an expanded tax base that will benefit our economy. 
Furthermore, the advanced technical capability we offer today 
will continue to improve and provide growing value to our 
society. On behalf of my colleagues at 3D Aerial Solutions, I 
thank you for allowing the opportunity to speak to you today.


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Testimony of

    Brian Streem

    CEO

    AeroCine

       Before the United States House of Representatives

                  Committee on Small Business

    ``Taking Flight: Small Business Utilization of Unmanned 
                           Aircraft''

                         July 15, 2015

    Chairman Chabot, ranking member Velazquez and members of 
the committee--thank you for having me here today and for 
holding this critical hearing--it is my honor to be here before 
you.

    My name is Brian Streem and I am the co-founder and CEO of 
AeroCine, a drone company that uses Unmanned Aerial Vehicles 
(UAVs) to fly Hollywood cameras for movies, television, 
advertising and real estate among other things.

    I wish I could tell you that I am one of the world's 
foremost roboticists or rocket scientists but for a hearing 
such as this, my experience as an artist and NYU Film School 
graduate is the real story. It just so happens, I might humbly 
add, I am building my own drones and consider this part of the 
new American Dream.

    The Unmanned Aerial Systems (UAS) industry worldwide has 
created a new generation of entrepreneurs who are innovating 
with small businesses that will reshape the global economy. 
Safe and responsible use of UAS will be ubiquitous across every 
sector of the economy. Unfortunately, this worldwide phenomenon 
is in jeopardy here at home in the United States due to the 
current state of regulation that prohibits commercial 
operations absent an exception. I consider myself lucky as 
AeroCine was among the very first U.S. companies to receive an 
FAA exception to operate commercially but we continue to have 
to seek permission to adapt and change to what clients need. It 
is expensive, time-consuming and frustrating.

    And yet, my passion for this industry has not waned.

    Three years ago witnessing a quadcopter flying a miniature 
camera capturing breathtaking videography. I was astonished and 
realized that this new technology would introduce the world to 
a new creative frontier, in addition to hundreds, if not 
thousands, of additional efficient and paradigm shifting 
innovations. The implications for filmmaking were readily 
apparent. I thought, if someone could put a small camera on a 
small multirotor, why could I not put a thirty-pound, high-
quality cinema camera on a twenty-five pound multirotor?

    Film producers make extensive use of cranes, camera cars, 
and helicopters, all in an elaborate effort to get the best 
shot. This is sufficient and still viable in some cases, but 
drones are more cost effective and when operated responsibly 
can greatly reduce potential risks to human lives. A drone has 
the capability to replace all of these on film sets while 
reducing the risk to human life and enhancing the artistic 
pursuit. UAVs excel at showing us our world in new, fascinating 
and beautiful ways. What excited me about drones three years 
ago is the same thing the excites me today--at their very core, 
drones present a way to easily p0lace a sensor anywhere in 
three dimensional space. What could once only be dreamed can 
now be produced.

    What began as an idea for my business partner Jeff Brink 
and me to turn a quick profit in the world of ultra high-end 
production grew quickly and far exceeds what we had initially 
conceived. When we started the company we planned to simply 
purchase a drone to carry large cinema cameras. Finding no 
suitable system on the market, we drew from academic and 
aerospace circles to build a team of engineers and set out to 
create an aerial robotic system of our own. Today our work 
ranges from designing custom UAVs to operating UAVs for big 
budget films, television shows, live programs, and special 
events. We are proud to be bringing to consumers images and 
video that has never been imagined.

    The FAA's efforts to integrate UAVs into the national 
airspace (NAS) are commendable in the face of extraordinary 
challenges. One notable step is the increased speed with which 
the FAA is awarding Section 333 Exemptions. The publication of 
a proposed rule for small drones is also promising, but we 
understand we may be a year or more away from a final rule, and 
even so, the proposed rule is in many respects too restrictive. 
We recognize the FAA prefers the incremental approach of 
crawl--walk--run. But right now regulation in the United States 
is sorely lagging behind the technology, which is sprinting. 
The industry in United States has been quick to create 
innovative hardware and software solutions ranging from auto-
deploying parachutes to designing automated air traffic control 
(ATC) schemes. This technology exists to protect people and 
property in the NAS and on the ground and as a nation, we must 
be able to rapidly adopt these solutions.

    UAV operators in America are subject to the onerous task of 
satisfying bureaucratic hurdles which do little to enhance 
safety, such as securing certificates of authorization (COAs) 
for flights under 400' above ground level (AGL). Securing a COA 
can take anywhere from hours to weeks for a routine series of 
flights.

    A commercial UAV operator must also employ an FAA licensed 
ATP, Private Pilot or Recreational or Sport Pilot to fly their 
unmanned vehicles. The skills of piloting a passenger plane 
versus an unmanned vehicle are worlds apart--as the FAA 
acknowledges in its proposed rule--and this requirement does 
little to enhance public safety.

    Evidenced by many companies move to test in Canada and 
elsewhere, if we do not scramble to bring our regulations up to 
speed quickly our innovators will be eclipsed by entrepreneurs 
in other countries that have an established legal framework.

    We would like to see FAA expand its Section 333 Exemption 
authority to include flights over persons not involved with the 
particular UAS operation, flights closer than 500 feet from 
such persons, and operations beyond the visual line of sight 
(VLOS). These various operations can be conducted safety 
because of the technological capabilities of the drone and 
because of operational limitations the FAA can impose.

    Even after the FAA issues its final rule for small drones, 
we believe the FAA should use its discretion to authorize 
operations beyond what the rules allow, provided the safety 
case can be made. This can be done through the Section 333 
Exemption process, or some other process that avoids both 
another rulemaking or protracted type and airworthiness 
certification.

    AeroCine stands ready to assist this committee and the U.S. 
Congress in bringing this exciting technology to consumers and 
we thank you for your leadership in holding this hearing.

    Mr. Chairman, ranking member Velazquez and members of the 
committee, this concludes my opening statement. I look forward 
to answering any questions from the Committee.

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             Motion Picture Association of America

   Statement for the Record in the House Committee on Small 
                        Business Hearing

    ``Taking Flight: Small Business Utilization of Unmanned 
                           Aircraft''

                         July 16, 2015

    The Motion Picture Association of America is excited to be 
on the forefront of small unmanned aircraft system innovation. 
The MPAA has worked closely with the Federal Aviation 
Administration and sUAS operators to secure cinematography as 
among the first approved commercial applications of unmanned 
aircraft in the United States. Incorporating sUAS in domestic 
film and television production is not only safely advancing 
aerial photography and helping tell stories in new and exciting 
ways. It is also starting to generate the economic benefits 
that the technology can bring our country by reducing costs and 
advancing the domestic aviation industry. And the sUAS 
operators that our industry turns to for this new and exciting 
application of technology are invariably small businesses. Such 
reliance on small businesses is typical for the film and 
television industry. Of the 99,000 businesses located in every 
state of the Union that make up the industry, 85 percent employ 
10 or fewer people.

    As the voice of the motion picture, home video and 
television industries, the MPAA submits this statement on 
behalf of its members: Paramount Pictures Corp., Sony Pictures 
Entertainment Inc., Twentieth Century Fox Film Corp., Universal 
City Studios LLC, Walt Disney Studios Motion Pictures, and 
Warner Bros. Entertainment Inc. The film and television 
industry is currently employing sUAS under exemptions the FAA 
granted vendors to use the aircraft in scripted, closed-set 
filming. The controlled nature of our sUAS use greatly limits 
exposure to the general public, minimizing any safety or 
privacy concerns.

    When the first handful of sUAS operators received exemption 
approval from the FAA last fall, Senator Dodd, MPAA's Chairman 
and CEO, called the announcement ``a victory for audiences 
everywhere as it gives filmmakers yet another way to push 
creative boundaries and create the kinds of scenes and shots we 
could only imagine a few years ago.'' The MPAA and its members 
look forward to the continued development of this budding 
sector of the film industry as we work with the FAA to 
establish formal rules allowing use of sUAS in domestic movie 
and television production.

    Filming with sUAS is already authorized abroad and we have 
now built a positive track record here at home, having 
completed a growing number of successful flights. One of the 
small businesses we work with that received an exemption from 
the FAA in September 2014, Aerial MOB, has already completed 
more than 60 film projects to date totaling more than 1,200 
successful flights. Advancing such domestic use will help keep 
production revenues from leaving our shores, promote jobs, 
expand the U.S. aviation industry, and provide real-world 
experiences in controlled environments to help pave the way for 
other uses of sUAS.

    Looking ahead, we asked the FAA earlier this year in the 
formal rulemaking proceeding to allow additional flexibility, 
such as night flying, for filming in controlled environments as 
technology advances. We are in the initial stages of sUAS 
cinematography in the United States and, as use grows, the 
capabilities of the systems will likely evolve rapidly.

    We thank Chairman Chabot and Ranking Member Velazquez and 
the other members of the Committee for their attention to this 
matter. We look forward to continuing our work to further 
integrate the use of sUAS into domestic film and television 
productions, and are eager to see how the creative minds of our 
industry use the techno9logy to the benefit of audiences around 
the world.

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