January 9, 2019 Submitted Electronically The Honorable Matthew S. Borman Deputy Assistant Secretary for Export Administration U.S. Department of Commerce 1401 Constitution Avenue, N.W. Washington, DC 20230 RE: Agency/Docket No. 180712626-8840-01 / BIS-2018-0024 Dear Mr. Borman: The Commercial Drone Alliance (“CDA”) is an independent non-profit organization led by key members of the U.S. commercial drone industry. CDA brings together commercial drone end-users, manufacturers, insurance providers, investors, service providers, and vertical markets including oil and gas, precision agriculture, construction, security, communications technology, infrastructure, filmmaking and more. CDA works with policymakers at all levels of government to craft policies for industry growth and seeks to educate the public on the safe and responsible use of commercial drones to achieve economic benefits and humanitarian gains. On behalf of CDA, the following comments are submitted to help inform the federal government’s decision-making regarding the potential designation of certain drone-related technology as “emerging technologies” under the Advanced Notice of Proposed Rulemaking issued by the Bureau of Industry and Security (“BIS”) regarding Review of Controls for Certain Emerging Technologies (“the ANPRM”), 83 Fed. Reg. 58201 (November 19, 2018). As the Trump Administration understands, we are at a critical and exciting time for the commercial drone industry in the United States. We have the opportunity now to build our economy, create jobs, unleash the innovation of entrepreneurs and move our country forward by rapidly integrating commercial drones into our National Airspace System (“NAS”). Indeed, the federal government (including the White House, Department of Transportation, Federal Aviation Administration and other agencies) is working to do this now. In November 2017, the Trump Administration launched the Unmanned Aircraft Systems Integration Pilot Program, bringing the federal government, states, tribes, localities and industry together to open the skies to drones for critical infrastructure inspections, support for emergency management operations, 1
homeland security and much more. This program is successfully taking steps to move UAS regulatory boundaries forward in the United States. Once properly enabled, the integration of drones into our NAS will save countless lives and have a significant economic impact here in the United States. A recent PricewaterhouseCoopers report 1 estimated the global market value of UAS-powered solutions at over $127 billion. The FAA has projected there will be 11 million commercial drones sold here in the United States by 2020, one year from now. CDA understands that pursuant to the Export Control Reform Act of 2018 (“ECRA”), BIS is now seeking to define “emerging and foundational technologies” and establish appropriate export controls for such technologies. CDA acknowledges the need to safeguard certain sensitive technologies essential to U.S. national security and foreign policy objectives and appreciates BIS’s role in issuing and administering controls for such technologies. However, CDA urges BIS to consider the potential consequences of unilateral actions and overregulation on developing industries, including the U.S. commercial drone industry. As a general matter, CDA recommends that BIS clearly define the scope of the controlled technologies with precision and tailor new export controls to the most sensitive technologies, rather than imposing new restrictions on technologies that have substantial commercial and public safety applications. BIS must also provide sufficient time for public input from relevant industries in order to achieve an effective and targeted export controls regime. The exciting potential for the commercial drone economy is built on the assumption that our federal regulatory framework does not impose overly burdensome control measures that could suppress innovation. There is strong concern across the commercial drone community that a unilateral export controls regime that overregulates this developing industry will inadvertently harm America’s share of this hundred billion dollar commercial drone industry and jeopardize the ability of the United States to maintain a leadership role in this evolving industry. For this reason, CDA urges BIS to take the following points into account as it defines proposed criteria for control of emerging technologies related to the commercial drone industry. 1. Many Drone Industry Applications Are Civil and Unrelated to Military Use First, the drone industry has many potential civil applications unrelated to military applications. Drone technology has improved at a rapid pace, and offers a vast array of safety and efficiency benefits to companies for a wide variety of uses. Existing commercial applications for drones are limited only by our imagination. Across the country, drones have become powerful commercial and public safety tools for everything from performing industrial infrastructure inspections to make them safer and more efficient, helping grow crops in a more sustainable manner, performing damage assessments to save lives following hurricanes and other natural disasters, aiding first responders in search and rescue operations, and more. These applications are strictly civil in nature, and many of the underlying technologies are already available globally and are not considered to be sensitive from a national security perspective.
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https://www.pwc.pl/clarityfromabove
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In addition to existing commercial applications for drones, there are potential new commercial applications being explored with many benefits to U.S. consumers and industries. We are in the beginning phases of the commercial drone revolution and the technological advances leading to new and exciting drone uses that will transform society in the not-toodistant future. For example, drone package delivery is currently being tested and broad implementation is on the horizon. These drone package delivery services will revolutionize the delivery of medical supplies, food and goods to American consumers while taking delivery trucks off the roads and reducing environmental impact. A bit further on the horizon but nevertheless imminent, Urban Air Mobility (“UAM”), a safe and efficient system involving remotely piloted and autonomous passenger-carrying drones, will usher in a new era in urban transportation throughout the United States. 2. The Nascent Drone Industry is Developing and Needs Room to Grow The commercial drone industry in the United States is still developing and needs room to grow. The United States has been a particularly strong leader in innovation, and in commercial growth for the industry—with the value of drone activity rising from $40 million in 2012 to an annual impact of $31 billion to $46 billion on our country’s GDP in 2026.2 However, to unlock the full potential of drones in the United States, it is important that stakeholders, including government officials and regulators, members of the UAS industry, investors, academics, advocacy groups and others continue to communicate and collaborate. It is also critical that the United States and our allied countries continue to work together and exchange technology information. The drone industry also relies on a global supply chain which may be heavily impacted by controls on certain types of technologies. In order to continue development and innovation in this area, American companies must be able to procure components and share technology across borders. 3. BIS Must Define Controlled Industries Surgically CDA therefore urges BIS to take a surgical and nuanced approach in defining controlled industries. BIS should focus its new export controls only on the most sensitive technologies relevant to national security and defense to avoid unnecessary restrictions on commercial and civil-use technologies. In particular, CDA notes that the ANPRM identifies certain broad categories of technology for potential inclusion as “emerging technologies.” Many of these general categories are well beyond the “emerging” stage of development and relevant to the commercial drone industry. a. Artificial Intelligence and Machine Learning Technology First, the ANPRM identifies various categories of Artificial Intelligence (“AI”) and machine learning technology, much of which is critical to the commercial drone industry. Indeed, AI and machine learning technology allow commercial drones to see and act like human pilots. Computer vision assists commercial drones to navigate more effectively by allowing drones to see the world the way humans do. AI software is enabling drones to fly autonomously, even in dark, obstacle-filled environments or beyond the reach of GPS or other methods of connectivity. 2
https://www.mckinsey.com/industries/capital-projects-and-infrastructure/our-insights/commercialdrones-are-here-the-future-of-unmanned-aerial-systems
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Will commercial drone sense-and-avoid technology, which will be essential to expanded commercial drone operations in the United States, be deemed “computer vision”? Moreover, what level of automation will qualify as “artificial intelligence”? CDA urges BIS to tread carefully here given the broad relevance of this technology to the commercial marketplace, and consider narrowly targeting potential controls to the most sensitive applications of AI (e.g., AI that is specially designed for military or intelligence applications). b. Logistics Technology “Logistics technology” is identified as another potential emerging technology that may be subject to new controls. Recent advances in logistics technology have made drones a vital commercial tool for warehouse inventory management. Right now, companies are using small drones to make warehouses safer and more efficient. Small drones can fly around a warehouse or yard scanning inventory bar codes and RFID tags, greatly reducing the counting workload for humans in large distribution centers. In the coming years, logistics technology, including mobile electric power, will be crucial to enabling commercial drone package delivery services. c. Robotics Another category identified by the ANPRM includes robotics, which covers micro-drone and micro-robotic systems and swarming technology. This technology is key to many of today’s and tomorrow’s most promising small (less than 55 lbs.) commercial drone use cases. i.
Micro-Drone and Micro-Robotic Systems
It is unclear from the ANPRM what the definition of a “microdrone” would be, but CDA notes that the vast majority of current commercial drone operations in the United States involve small drones that weigh less than 55 pounds. For this reason, the scope of what technology constitutes a “microdrone” will have a significant impact on the future of small commercial drone operations in our country. ii.
Swarm Technology
“Swarm technology” is also identified under the Robotics category. This technology is used in some of today’s most cutting-edge commercial drone operations, and the ability to operate more than one vehicle per operator is critical to achieving the safety and efficiency benefits of commercial drones. Swarm technology allows multiple drones to stay in constant communication with one operator and with each other. This enables multiple drones to aid in large-scale projects such as the planting of new trees following wide-scale forest fire natural disasters. As technology and regulations evolve, commercial drone swarms will be deployed routinely to simultaneously cover and search large areas, which would save lives in an emergency rescue situation, and time and money in less dramatic situations. Swarm technology is also critical as the marketplace for automated ground-based vehicles develops in the United States given the potential safety and traffic management benefits that could arise from drone-tovehicle coordination and communication. A key question the federal government must therefore consider is the number and type of drones that constitute a “swarm,” and how this will affect commercial and public safety drone operations.
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d. Data Analytics Technology Data analytics technology is also identified as a category for possible control. This technology is crucial for the growth of the commercial drone market. Indeed, advances in data analytics technology are allowing commercial drones to process huge amounts of data in realtime. Aerial imagery that used to take humans hours, days, or weeks to review and analyze is being streamlined and automated by technology that strategically determines what kind of data and images are sufficiently important to collect. For example, drones being used to perform railway inspections can use a variety of onboard sensors (cameras) to inspect track conditions and identify defects that are invisible to the naked eye. Once detected, this software can be used to provide recommendations on what, if any, maintenance may be necessary. How “analytic technology” is defined could have a significant impact on the commercial drone industry in the United States. e. Hypersonics Hypersonics, including flight control algorithms, propulsion technologies, and specialized materials, are also identified as areas of possible control. All of these categories could impact the commercial drone marketplace. For example, it is unclear what is meant by “flight control algorithm.” Would this include the technology that enables Unmanned Aircraft Traffic Management (UTM) systems to thrive? This technology is critical as the federal government (NASA and FAA) partner with private industry to enable “highways in the sky” for commercial drones, which will be necessary to enable the most economically valuable commercial drone operations. 4. Deemed Export Controls Impact Research and Development New controls on “deemed exports” of drone-related technology would also have a significant impact on the growing commercial drone industry. U.S. companies frequently employ foreign nationals lawfully present and authorized to work in the United States and would be heavily impacted by restrictions on sharing technology with such employees. Companies would need to impose additional screening and controls during the recruiting process and would have less flexibility in hiring. In addition, new controls may require companies to engage in lengthy deemed export license applications for foreign national employees, impose technology access restrictions and new compliance procedures in the workplace, and conduct compliance training for any employees that work with such foreign national employees. These additional compliance burdens could have the unintended consequence of hindering innovation and growth in the U.S. drone industry, while placing additional burdens on the federal government to administer these new controls. While sensitive and military-related technology should continue to be carefully safeguarded, the imposition of unnecessary deemed export controls for commercial civil drone technologies would needlessly harm American competition in this area. 5. Conclusion Given how closely these categories track with the commercial drone industry, it will be critical for BIS to surgically define the categories of controls so as to avoid undermining U.S. leadership in the science, technology, engineering and manufacturing sectors – particularly around the commercial drone market. We must properly balance the safety, efficiency and economic benefits of the continued growth of the commercial drone industry in the United States
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as the federal government works to tailor new export controls to the most sensitive technologies. We thank you for your consideration of CDA’s comments.
Sincerely,
Lisa Ellman Co-Executive Director, Commercial Drone Alliance lellman@commercialdronealliance.org
Gretchen West Co-Executive Director, Commercial Drone Alliance gwest@commercialdronealliance.org
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About The Commercial Drone Alliance The Commercial Drone Alliance is an industry-led, 501(c)(6) non-profit association that is dedicated to supporting commercial drone industry market growth. The Alliance brings together commercial drone end-users, manufacturers, insurance providers, investors, service providers, and vertical markets including oil and gas, precision agriculture, construction, security, communications technology, infrastructure, newsgathering, filmmaking, and more. The Alliance aims to educate and collaborate with lawmakers at all levels of government on the benefits of commercial drones, technologies that enable safe flight, and continued growth of the commercial drone industry. Commercial Drone Alliance Members AiRXOS American Fuel and Petrochemical Manufacturers (AFPM) Apple AT&T Cape Center for Robot Assisted Search and Rescue (CRASAR) Choctaw Nation of Oklahoma CNN Crown Castle Datawing Global Digital Global Systems DII DroneUp
Ford Motor Company National Association of Tower Erectors (NATE) Nightingale Security ParaZero Red Mountain Scientific Security Industry Association (SIA) SkySafe SRC/Gryphon Sensors Talon Aerolytics uAvionix Uber WarnerMedia WhiteFox Defense Technologies Wing Aviation
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