Here’s Why the Drone Industry Just Had A Milestone Moment

June 21, 2016, 10:05 PM UTC
Flying drone with camera
Photogtaph by Buena Vista Images — Getty Images

Law and order could be coming to the skies for the commercial drone industry.

The Federal Aviation Administration finally revealed on Tuesday its much-anticipated ruling for how businesses can use drones for inspecting power lines, filming movie scenes, and taking photos of farmland.

The new rules, which take effect in late August, include limiting the use of drones to the daytime and up to 30 minutes before sunrise and 30 minutes after sunset; not flying drones over 400 feet in altitude; and requiring drone operators to qualify for flying certificates by passing exams.

The rise of drones over the past few years has sparked high hopes for businesses looking to incorporate them into their operations, like General Electric, which is testing drones to spot potential hazards near powerlines like tall trees that could topple during bad weather.

Drones have become so popular that consulting group PricewaterhouseCoopers said the global market for commercial drone work could be worth $127 billion. Of course, this is just a projection, and these projections are often wrong. But it does indicate that more businesses are interested in using drones than previously.

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But as more companies want to use drones, and as drone technology continues to improve, federal regulations have been slow to catch up. In April 2015, for example, Amazon (AMZN) sent a letter to the FAA that criticized the administration’s proposed drone rules for what the company said would undermine its planned drone-delivery service.

In particular, Amazon singled out the FAA’s mandate that drone operators must fly aircraft within their line of sight, which would make it difficult for drones to deliver packages over long distances.

The FAA’s new rules don’t appear to ease up on the visual line of sight mandate, and could still pose problems for companies like Amazon and Google (GOOG) that are exploring drone deliveries. Regardless, the new rules represent a milestone moment for the drone industry and show that the U.S. government is more willing to open the skies to flying robots than ever before.

“This is a watershed moment in how advanced technology can improve lives, as the Small UAS Rule allows companies, farmers, researchers, and rescue services alike to explore how drones can let them do more at a lower cost and a lower risk,” Brendan Schulman, vice president of policy and legal affairs for drone maker DJI, said in a statement. Schulman has been working with regulators to create the new ruling.

For Anne Swanson, a lawyer who specializes in drone regulatory issues for the Cooley law firm, the new rule represents a “big day” in her career that ranks with such noteworthy moments like when the U.S. adopted cellular rules and satellite standards. Swanson has been following the evolution of drone regulations for over a decade, and explained that rule-making process kicked off to full steam when the federal government issued the FAA Modernization Act and Reform Act of 2012 that included language requiring that it create rules to safely introduce drones to the national airspace.

In February 2015, the FAA issued its proposed rules and opened comments on them.

“Today marks the end of at least a decade-long process,” said Swanson.

The new rules, which applies to drones that weigh less than 55 pounds, represent “probably the most important day for the commercial drone industry,” said Gretchen West, a co-executive director of drone advocacy group the Commercial Drone Alliance. West said that some companies and drone advocates had concerns that the finalized FAA rules “would be overly strict,” but she said they provide “guidance that allows us to operate in a freer manner.”

Not everyone is pleased with the new ruling, however.

The Competitive Enterprise Institute, a business advocacy group, criticized the FAA rules, and its transportation policy expert Marc Scribner said in a statement, “The FAA ignored calls for less onerous regulations, dismissing arguments that advances in technology would mitigate many of the agency’s stated concerns.”

“Restrictions on beyond-visual-line-of-sight, nighttime, and other crucial operations for emerging business models can only be waived on a rigid case-by-case basis,” said Scribner.

Indeed, companies like Amazon and Google, whose drone delivery projects could still be impacted by the new rules are probably pleased that the rules are finalized, “but probably frustrated” that the rules aren’t as lenient as they could be, West said.

“We’re pleased to see progress on integrating UAVs into the airspace and look forward to working with the FAA as this rule is implemented,” a spokesperson for Google’s drone-based delivery project, known as Project Wing, said in an email to Fortune. Project Wing is being developed by X, Google’s research arm.

Fortune also requested comment from Amazon, which has not responded.

It’s a big moment that rules have been formulated, “but it’s still a long way to go” and represents more of a starting point for regulating drones in the commercial airspace, West explained.

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Companies that want to operate drones in ways not allowed under the new rulings can apply for waivers that would allow them to perform tasks like flying drones at night for building inspections. Although companies can already do this under the preexisting proposed drone regulations, both West and Swanson are optimistic that the new waiver system could be a speedier process than currently in place.

Additionally, FAA Administrator Michael Huerta said in a statement that the new rules are just the FAA’s first step and that it’s “working on additional rules that will expand the range of operations.”

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