Where can Amazon legally fly its drones?

Feb 18, 2015

The Federal Aviation Administration's proposed drone rules clip the wings of Amazon's Prime Air delivery service in the United States, but the online retailer could be eyeing other countries for testing to keep momentum going.

Amazon, in its sole statement regarding the FAA proposal, said it remains "prepared to deploy [Prime Air] where we have the regulatory support we need." Translation: We're willing to move our operations elsewhere.

It's not the first time the company (amzn) has hinted at the prospect. "Our continuing innovation through outdoor testing in the United States and, more generally, the competitiveness of the American small UAS [Unmanned Aircraft Systems] industry, can no longer afford to wait," said Paul Misener, Amazon vice president for global policy, in a note to the FAA written on Dec. 7, 2014. "Amazon is increasingly concerned that, unless substantial progress is quickly made in opening up the skies in the United States, the nation is at risk of losing its position as the center of innovation for the UAS technological revolution, along with the key jobs and economic benefits that come as a result. ... Without approval of our testing in the United States, we will be forced to continue expanding our Prime Air R&D footprint abroad."

Amazon already has a research and development facility in Cambridge, England, where it has been focusing on Prime Air. Less than five hours away, an independent facility in Wales specializes in outdoor drone testing, with permission from the United Kingdom's Civil Aviation Authority to test limited long-range trials.

While drone deliveries are still illegal in the U.K., the country does seem more open to the idea. Should that not work out, though, there are several other countries whose drone policies are more relaxed policies than the U.S.

Australia, for example, has warmly welcomed other companies wishing to test drone delivery. Google (goog) recently ran trials in Queensland, the third-most populous state in the country, for its Project Wing autonomous drone delivery service.

And, in Germany, DHL launched an experimental drone delivery service called "parcelcopter" in December 2013, carrying small parcels to the small island of Juist (population 2,000).

"Our DHL parcelcopter 2.0 is already one of the safest and most reliable flight systems in its class that meets the requirements needed to fulfill such a mission," said Jürgen Gerdes, CEO of Deutsche Post DHL's Post-eCommerce-Parcel Division, in a statement made at the time of the launch.

Canada, meanwhile, has the same line-of-sight requirements the FAA proposed, but it doesn't require the operators to be certified as long as the UAS is under 55 lbs.

And while Amazon isn't likely to greatly expand its footprint in China merely to focus on drones, the country has shown a willingness to embrace the technology. Earlier this month, Alibaba's Taobao division announced on its blog that it had launched a three-day trial, using drones to deliver a specific type of tea to 450 customers within an hour of its distribution centers in Beijing, Shanghai and Guangzhou.

It's important to note that none of these countries has signed off on widespread drone deliveries. And the FAA has been clear that its recent proposals are not final.

Still, it does seem that a face-off between the agency and Amazon has been brewing for some time.

"I fear the FAA may be questioning the fundamental benefits of keeping UAS technology innovation in the United States," said Misener in his December note. "Simply put, Prime Air has great potential to enhance the services we already provide to millions of our customers by providing rapid parcel delivery that will also increase the overall safety and efficiency of the transportation system. ... Without the ability to test outdoors in the Unites States soon, we will have no choice but to divert even more of our UAS research and development resources abroad."

Like this story? Read "Get Ready for 'Drone Nation'" from the Oct. 8, 2014 issue of Fortune magazine.

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