Illegal drone business thrives in US

Despite regulations banning commercial drone use in the United States, a thriving black market for drones is on the rise, sending the Federal Aviation Administration into a tailspin.

Popularized by their military applications, drones are now taking flight over U.S. skylines with at least hundreds of small, unmanned aircraft hard at work buzzing over football stadiums, Hollywood sets and farms.

As the domestic debate over drones and associated privacy and safety issues heats up in Washington, D.C., companies aren't waiting for formal rules that would permit their commercial use. President Obama has mandated that Congress come up with rules that would permit commercial drone use, but they are not due until 2015.

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A search on Google for "drones" turns up dozens of companies brazenly advertising drone-related services here in the United States. Drones for hire are used on Hollywood film sets (to get that overhead shot cheaply), to create promotional videos for real estate and to help farmers crop dust and keep a bird's-eye view on livestock. [See video: Autonomous Drones: Not Just Military Tech Anymore]

"SkyShutter RCA Helicams can fly almost anywhere," advertizes New York-based SkyShutter on its website. Los Angeles-based Vortex Aerial lists dozens of clients on its website, including the NFL, Indiana University and the La Quinta-California–based SilverRock Golf resort that used the company to create "tee-off flyovers."

"Commercial drone technology is set to take off," says Ben Gielow, government relations manager with the Association for Unmanned Vehicle Systems International (AUVSI), an industry trade association. The AUVSI boldly estimates drones will add 70,000 jobs and $13.6 billion to the U.S. economy over three years, once approved for commercial use.

These radio-controlled vehicles are a far cry from the unmanned military aircraft that fly missions over Pakistan. Commercial drones typically cost from $10,000 to $20,000, weigh 8 to 30 pounds, and are armed only with swiveling HD cameras and GPS guidance systems. They are the same type of aircraft, often the same models, that amateur fly clubs use on weekends. But once you get paid for taking an aerial picture, it all becomes illegal. [See also: China's Drone Swarms Rise to Challenge US Power]

Danger from above
It's about safety, says the FAA. "Drones can pose a hazard to aircraft, people or property on the ground," said FAA spokesman, Les Dorr. The agency is worried about a Wild West climate that if left unchecked could get someone seriously hurt. The FAA has launched 23 recent investigations into complaints of illegal drones, according to a Freedom of Information Act request by television station WRTV in Indianapolis, Ind.

In one case, the FAA proposed a $10,000 fine against drone business Team BlackSheep for buzzing the University of Virginia campus while making a promotional video. According to the FAA, Team BlackSheep was flying recklessly and had some students ducking for cover.

Raphael Pirker, co-founder of Team BlackSheep, denies endangering anyone and says he was not paid for the filming.

Pirker and other drone entrepreneurs say their aircraft are safe and reliable, and pose no threat to people or privacy. The business of drones is mature and ready to grow, they argue. Making matters more frustrating, they say, is that these companies have tens of thousands of dollars invested in drone equipment and are seeing their businesses grind to a halt.

Earlier this year, Dale Slear, co-owner of aerial photography company Beat Copter, received a cease and desist letter from the FAA, grounding the company's $15,000 Cinestar 8 Octocopter. The FAA letter stated that the agency was investigating a complaint that Beat Copter was advertising its aerial photography services for commercial use via its website.

Slear says he knew the legality of flying drones for commercial use was problematic. "We didn't want to look under that rock," he says. "We figured if all these other companies are doing it, why can't we?"

Aerial photography was a growing and lucrative niche for Slear's design and photography business that attracted clients, such as real estate companies, willing to pay ten times what a standard photography gig paid.

An industry in waiting
Unlike most other industries that would rather have regulators buzz off, the Association for Unmanned Vehicle Systems International and companies such as Beat Copter are begging for it. "We want oversight. We want rules," Gielow says. "Our members are dying to know what the safety criteria is, so they can start making money." [See also: Drones Large and Small Coming to U.S.]

Meanwhile industries that stand to gain from the use of drones are growing restless. "We are asking the FAA for an expedited timeline for approval of unmanned aircraft before the 2015 mandate," says Kate Bedingfield, spokeswoman for the Motion Picture Association of America. For Hollywood, drones offer a much lower priced and safer alternative to the expensive helicopter flyover shots and skycranes used to film sweeping, top-down video, Bedingfield says. The National Football League has requested similar expedited permission.

In the interim many companies continue to fly in the face of the law. "I'm surprised to see these companies publicly promoting their services online," says Pirker, who claims he has reformed and no longer operates drones illegally. "It would be like drug dealers promoting the drugs they sold."

When contacted, Vortex Aerial, which advertizes aerial video services online, declined to comment. Jason Lam, who owns SkyShutter, says he operates under what he calls a "large grey area." He declined to comment further.

One aerial videographer, who asked that he not be identified, said he'd been contacted by the FAA, which warned that what he was doing was illegal. Despite the warning, he continues to advertise his services online and take jobs. The owner said if he hears back from the FAA with something more than a warning, he'll quit, but for now it's good money.