Is that drone flying over your yard legal?

This week, we’re reading about the complex, messy reality of drones entering our skies at a rapid clip.

Is that a bird, a plane, or… a sky full of drones?
Although drones have operated in U.S. national airspace since the early 1990s, the proliferation of small drones over the past few years has made questions around their use ever more pressing. As uses and users of these ‘unmanned aerial vehicles’ or UAVs expand beyond their original intent, we consider the impact of these mini-planes.

This week, we’re looking at the key issues raised by drones and finding inspiration for a potential regulatory paradigm — a concept called performanced-based regulations — from a surprising place.

We’ll also learn about how college students are pushing back against Palantir’s recruitment efforts on their campuses, the allure and revival of retro tech, and consider whether pressure on tech giants will make 2020 a bumper year for new, nimble startups.

We hope you’ve been enjoying this newsletter and would love any feedback (erica@nycmedialab.org). Thank you again for reading!

Best,
Erica Matsumoto
NYC Media Lab

Drones have operated in U.S. national airspace (defined as the navigable airspace in the U.S. for civil, commercial, and military aviation) since the early 1990s. They’ve historically been used to support public uses, like military and border security operations.

However, small drones (drones weighing less than 55 pounds) have become more commonplace, and their use has expanded to a broad range of commercial operations, such as law enforcement activities, search and rescue operations, inspecting pipelines and infrastructure, photographing real estate, surveying land, disaster assistance, news gathering (check out how The New York Times used drones to capture and recreate the impact of Hurricane Dorian), and recreational purposes.

According to the FAA’s monthly reports over the period February 2014-April 2018, drone sightings have gone up by hundreds-fold over the past 5 years:

Source: GAO

Small drones are generally flown via remote control and restricted from operating beyond the pilot’s line of sight, over people, above 400 feet, and within certain distances of an airport. The following graphic shows the current and potential future civilian and commercial uses for small drones:

Source: GAO

DANGERS OF DRONES

Small drones raise a number of safety and security concerns because of how easy they are to purchase and use. The safety risks associated with them include:

• Potential for unintentional collisions with manned aircraft or other objects
• Loss of control if the communications link between the drone and the pilot’s handset fails
• Risk of grounding busy airports (which actually happened at Newark Airport)

There are also concerns about drones’ potential to cause damage to people and property, result in injury, or death and their national security implications (small drones can breach traditional security perimeters at sensitive sites, such as nuclear power plants, and public venues like sports stadiums). We were suprised to learn that drones were used as delivery vehicles to carry four pounds of plastic explosives during an assassination attempt on Venezeualan President Nicolas Maduro last year.

Finally, there are privacy implications associated with drones, including the risk of unwanted or unwarranted surveillance, the collection and use of drone-collected data and potential violations of constitutional privacy protections.

AIRSPACE OWNERSHIP AND USE

No discussion about drones’ future can be complete without considering the airspace ownership issues that they raise. NPR raised these questions in 2014 (video below):

These questions are becoming more pressing as drones become more commonplace. In response to the proliferation of drones, Gregory McNeal, an associate professor at the Pepperdine University School of Law, suggested in a November 2014 article for the Brookings Institution that legislators should follow a property rights approach to aerial surveillance. He argued that explicitly extending property owners’ rights in their airspace up to 350 feet above ground level may solve more public and private harms associated with drones by allowing landowners to bar intrusions into their airspace by both government and private parties.

In May 2019, the Federal Aviation Administration (FAA) issued new rules for hobbyist drone pilots in an effort to keep U.S. airspace safe and available for manned and unmanned aircraft. The new FAA regulations ban hobbyist and recreational drone pilots from flying in controlled airspace with the exception of some designated areas. This video by 51 Drones offers a succinct summary of the new regulations:

Speaking at the Brookings Institution nearly four years later in September 2019, Mark Bathrik, director of the Dept. of the Interior’s Office of Aviation Services, echoed McNeal. He called drones a “completely new class of aircraft” operating in largely unmonitored airspace that “nobody cared about” until they came along and made the case for redesigning the U.S. national airspace around drones.

THE FUTURE’S COMING… DELIVERED BY DRONES

Although drone delivery is only a small portion of the drone market, Amazon — which is making a huge push on drone delivery in an effort to cut its fulfillment costs — has helped make it the face of the commercial drone industry. Check out this slick video for Amazon’s first-ever drone delivery:

However, Amazon’s not the only — or the most impactful — company developing a drone delivery concept. Matternet, which partnered with Malawi to deliver children’s blood samples for testing to ensure they can receive medical drugs when needed and on time, is just one of a number of drone delivery companies looking to use drones to improve health outcomes.

This leads us to ask: How do companies navigate complex delivery supply chains? Airports present a major challenge for drone delivery. The following image shows the area around Amazon’s Arizona fulfillment centers. The areas that drones can’t fly in are marked in red (two of the fulfillment centers are in controlled airspace, and would require an authorization or waiver for drones to even take off):

Source: Rupprecht Law Similarly, in New York City, much of the city’s airspace is Class B airspace that doesn’t permit drones:

Source: Drone U So can one fly a drone here? Yes, in fact, NYC-based drone hobbyists can go to the following five places to fly their drones without running the risk of a $2,200 fine:

• Calvert Vaux Park in Brooklyn
• Marine Park in Brooklyn
• Flushing Meadows Corona Park in Queens
• Forest Park in Queens
• La Tourette Park (Greenbelt) on Staten Island

NEW PARADIGMS FOR REGULATION

Those looking for a solution to the question of drone regulation may want to look to Rwanda. The Rwandan government has developed the first-ever national scale performance-based regulations (PBR) — a concept that has been proposed by experts in recent years, but never fully developed or implemented until Rwanda used it.

Under PBR, civil aviation authorities establish acceptable thresholds of risk (rather than prescribing specifications) and allow manufacturers and operators to demonstrate how they’ll meet those standards, regardless of the specific equipment used.

Rwanda — the first country to have national scale drone delivery — uses drones to bring blood products to rural clinics. In January 2018, the country rewrote its drone regulations to allow more use cases and expand the number of drone companies in the company. Developed in partnership with the World Economic Forum’s Centre for the Fourth Industrial Revolution, the newly enacted policies make Rwanda the first country in the world to design and adopt a PBR framework for all classes of drones. It sets a new standard for open, accountable, and risk-based access to airspace to enable any type of drone operation in any location while maintaining safety.

Campus activists find a target at the intersection of immigration and technology: Palantir

College activists, including students and faculty, have organized protests against secretive tech company Palantir. Thanks to the work of Mijente, a nonprofit that works on behalf of the Latinx and other marginalized communities, students in the U.S. and U.K. have:

• Held teach-ins and rallies
• Disrupted Palantir-sponsored ethics workshops
• Distributed flyers, and
• Developed ethics-in-technology reading guides for their peers

Their goal is to shed light on Palantir’s work with federal agencies including U.S. Immigration and Customs Enforcement (ICE). ICE recently re-signed its contract with Palantir earlier this summer, which is expected to run through 2022.

The enduring allure of retro tech

Let’s take a moment to celebrate the craft and care behind making a mixed tape. Even as we all crawl out out of our collective Black Friday/Cyber Monday shopping stupors during which it’s nearly guaranteed that we bought new things, some customers are returning to oldies such as Walkmans, DVD players and Zunes (remember those?) in a gesture of resistance to our “relentless drive for the new.”

Big tech backlash could spur the next generation of startups

Axios’ Dan Primack argues that federal regulations’ intensification of their antitrust investigations into tech incumbents like Apple, Amazon, Facebook, and Google will benefit tech startups in 2020. This isn’t about successfully breaking up the goliaths (that’ll take years, if it’s even successful) — it’s about distraction and disincentives for the incumbents to move into new spaces, which will create more space for startups to grow.

This Week in Business History

December 4, 1928: Goldman Sachs Trading Corporation is formed

Its initial offering is $100 million of stock in itself, backed by its investments in other companies. This is a fairly new form of investment opportunity that is supposed to stabilize the market and provide the benefits of professional management.

In February 1929, Goldman Sachs Trading Corporation merges with another trust, forming the Shenandoah Trading Corporation. Stocks totalling $102.3 million are authorized for Shenandoah, but the offering is oversubscribed; so more stock is issued and a new trust, Blue Ridge Corporation, is formed and $142 million in stock is issued.

However, the ill-managed trusts wind up artificially boosting profits by:

• Borrowing
• Loaning their own surplus cash to the call loan market (thereby destabilizing the market)
• Frequently diluting themselves with “junk” securities from their parent investment banks when the parent banks couldn’t unload the junk elsewhere, and
• Investing in affiliated trusts instead of bona fide industrial companies.

Ultimately, neither stock does well for investors: Shenanodah stock, which is first issued at $17.50 before rising to $36, ultimately falls to 50¢. Similarly, Goldman Sachs Trading Corporation peaks at $222.50 before sinking to about $1 two years later. One investor says of his broker, “He took my fortune and ran it into a shoestring.”

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