Unmanned

Aviation Systems:
FAA Rulemaking
and Regulatory
Impact Analysis

Todd Steiner
Economic Analysis Division
Office of Aviation Policy & Plans

12/22/2020

Federal Aviation
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Federal Aviation
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Agenda
• Bottom Line Up Front: FAA UAS Rulemaking
• Safety Continuum
• Overview of Current Regulations
• Overview of Future/Pending Regulations
 Detailed Overview of Remote Identification of Unmanned
Aircraft
 Detailed Overview of Operation of Small Unmanned Aircraft
Over People
• Backup Slides—Primer on Regulatory Impact
Analysis

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Bottom Line Up Front: FAA UAS Rulemaking
• The FAA began revising it’s regulations in 2015 to accommodate unmanned
aircraft systems (UAS) with certain registration and operating rules.
• Rapid advances in technology and increased commercial and government
applications necessitate regulations that enable expanded UAS operations while
maintaining public safety.
• Rulemakings consider tradeoffs between safety risks and economic benefits of
expanded UAS operations.
– Balancing benefits and changes in risks for enabling rules (dynamic and cumulative).

• Enabling expanded UAS operations and integration in the National Airspace

System (NAS).
– Layered approach and use of performance standards where possible (both operating and
manufacturing standards).
– Uncertainties: Key elements yet to be developed.
– Beyond visual line of sight, package delivery, and Urban/Advanced Air Mobility.
– Unmanned Aircraft System Traffic Management (UTM).

• Rulemaking informed by stakeholder and public comment.

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Safety Continuum & Rulemaking

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Current Regulations
• Registration and marking of small UAS
(i.e., under 55 lbs)
• Operating rules for commercial and
recreational operators
• Remote pilot certification
• Prohibitions and restrictions on expanded
operations (e.g., operating over people, at
night, and beyond visual line of sight)

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Future Regulations
• Remote Identification of Unmanned Aircraft (Publication
on 01/15/2021)
• Operation of Small Unmanned Aircraft Over People
(Publication on 01/15/2021)
• Modernization of Special Airworthiness Certification
• Prohibition of the Operation of an Unmanned Aircraft in
Close Proximity to a Fixed Site Facility
• Prohibition Regarding Weapons
• Registration and Marking Requirements for Small
Unmanned Aircraft (Currently an IFR)
• Unmanned Aircraft Systems Expanded Operations

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What is Remote ID?
• Remote ID is the ability of a UAS in flight to provide
identification and location information that other parties can
receive.
• Remote ID is the equivalent of a license plate that broadcasts.
• Will provide awareness of the identity and location of a UAS that
is operating.

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 Remote ID Benefits
• Addresses safety, national security, and law enforcement concerns
regarding the further integration of these aircraft into the airspace
of the United States.
 Provides data to discern compliant airspace users from those potentially posing
a safety or security risk.
• Promotes compliance by operators of unmanned aircraft by
providing UAS specific data, which may be used in tandem with
new technologies and infrastructure to provide airspace
awareness.
• Provides a foundation for enabling greater operational capabilities.
• This rule provides cost savings for the FAA from a reduction in
hours and associated costs expended investigating unmanned
aircraft incidents.
 This includes quantified savings to the FAA only. A variety of other entities
involved with airport operations, facility and infrastructure security, and law
enforcement would also save time and resources involved with unmanned
aircraft identification and incident reporting, response, and investigation.

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Remote ID Costs
• Additional costs for manufacturers of
unmanned aircraft, owners and operators of
registered unmanned aircraft, entities
requesting the establishment of an FAA-
recognized identification area, and the FAA.
• Over a 10-year period of analysis, the
primary estimate of present value net costs
are about $186.53 million at a seven percent
discount rate with annualized net costs of
about $ 26.56 million.

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Remote ID Net Costs—Primary Estimate ($Millions)
10-Year 10-Year
Present Present
Value Annualized Value Annualized
Affected Entity/Category (3%) (3%) (7%) (7%)
Unmanned Aircraft Owners/Operators 181.26 21.25 144.89 20.63

Unmanned Aircraft Producers 33.81 3.96 30.91 4.40

Developers of Means of Compliance 2.90 0.34 2.40 0.34

FAA Recognized Identification Area Requests 0.64 0.08 0.56 0.08

FAA Costs 12.06 1.41 10.61 1.51

Total Costs 230.69 27.04 189.38 26.96

Cost Savings (FAA Investigations) (3.58) (0.42) (2.85) (0.41)

Net Costs 227.11 26.62 186.53 26.56

Table notes: Columns may not sum to total due to rounding. Savings are shown in parenthesis to distinguish from
costs. Estimates are provided at three and seven percent discount rates per Office of Management and Budget (OMB)
guidance.

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Operations Over People
• This rule amends Federal Regulations by permitting the
routine commercial operation of small unmanned aircraft
over people, at night, and over moving vehicles under certain
conditions.
• This rule is the next step in the FAA’s incremental approach
to integrating unmanned aircraft systems (UAS) into the
national airspace system, based on demands for increased
operational flexibility and the experience the FAA has gained
since it initially published operating rules with restrictions.
 Note: Prior to the rule some of these operations occurred under waivers.

• This rule also builds on the performance-based regulatory

philosophy established other rules.

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 Operations Over People Benefits
• The rule enables further operations of small UAS that will benefit
the economy and facilitate innovation and growth across a variety
of sectors, such as construction, education, infrastructure
inspection, insurance, marketing, and event photography.
• Operations previously allowed (prior to the rule) will become less
onerous and, in many instances, more efficient with this rule
because remote pilots would not need to avoid flying over people
or clear an area of non-participating people in advance of flying.
 In addition, operators no longer have to avoid flying over vehicles.
• The cost savings of this rule include relief provided through online
training for remote pilots and relief from time the FAA and industry
expends in processing waivers.

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Operations Over People—Type of Activities
Type of Activity Waiver Requests
Aerial Photography 114
Aerial Survey 82
Construction 45
Education 5
Emergency Management 42
Events 229
Film and TV 17
Infrastructure Inspection 31
Insurance 1
Marketing 29
Newsgathering 11
Real Estate 43
Source: A sample of FAA Waiver Requests for Operations Over People.
Note: Waivers that did not describe the activity to be conducted over people
are excluded from this tabulation.

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Operations Over People Costs & Savings
• Costs
– The FAA converting the administration of tests to
administration of online training
– Manufacturers conducting testing, analysis, or inspection
to comply with the requirements of manufacturing a small
unmanned aircraft for operations over people
– Remote pilots studying additional subject matter related to
activities enabled by the rule
• Cost Savings
– Relief provided through online training for remote pilots
– Relief from time the FAA expends in processing waivers

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Operations Over People Net Savings ($Millions)
10-Year 10-Year
Present Present
Value Annualized Value Annualized
Forecast Scenario (3%) (3%) (7%) (7%)
Base Scenario—Primary Estimate
Costs 146.44 17.17 119.98 17.08
Cost Savings (834.71) (97.85) (671.28) (95.58)
Net Cost Savings (688.27) (80.69) (551.31) (78.49)
Low Scenario
Costs 102.96 12.07 85.32 12.15
Cost Savings (616.60) (72.28) (501.51) (71.40)
Net Cost Savings (513.64) (60.21) (416.19) (59.26)
High Scenario
Costs 207.17 24.29 169.27 24.10
Cost Savings (1,158.84) (135.85) (927.41) (132.04)
Net Cost Savings (951.67) (111.56) (758.14) (107.94)
*Table notes: Columns may not sum to total due to rounding. Savings are shown in parenthesis to distinguish from
costs. Estimates are provided at three and seven percent discount rates per OMB guidance.

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Operations Over People “Enabled”
Operations Forecast - Base Case (In Millions)
Day Night
Year Cat 1 Cat 2 Cat 3 Total Cat 1 Cat 2 Cat 3 Total
1 0.8 0.8 0.2 0.2
2 1.5 31.3 22.0 54.8 0.3 5.3 0.7 6.3
3 2.3 46.2 23.6 72.1 0.4 7.3 0.8 8.5
4 2.4 48.7 24.9 76.0 0.4 7.7 0.8 9.0
5 2.5 51.2 26.1 79.8 0.4 8.1 0.9 9.5
6 2.6 53.5 27.3 83.4 0.4 8.5 0.9 9.9
7 2.8 55.8 28.5 87.1 0.4 8.8 1.0 10.3
8 2.9 58.0 29.6 90.5 0.5 9.2 1.0 10.8
9 3.0 60.1 30.7 93.8 0.5 9.5 1.0 11.2
10 3.1 62.1 31.7 96.9 0.5 9.9 1.1 11.5

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Operations Over People: Increased Safety Risks
• The operation of small unmanned aircraft over people may result in an
increased safety risk.

• Although the FAA expects the probability of injuries that may occur from
an operation of a small unmanned aircraft over people to be small, when
that low probability is multiplied by an increased number of operations,
some additional risk of injury exists.

• This final rule’s performance-based requirements establish categories of

small unmanned aircraft operations defined primarily by injury severity
level posed.

• Compliance with the manufacturer and operating requirements that apply

to these categories would mitigate the level of risk when operating over
people.

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 Backup Slides—Primer on
Regulatory Impact Analysis

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The What, Why, and How of
Regulatory Impact Analysis
What:
• Regulatory impact analysis is a tool agencies
use to anticipate and evaluate the likely
consequences of rules.
– It provides a formal way of organizing the evidence on
the key effects—good and bad—of the various
alternatives that should be considered in developing
regulations.
– The purpose is to (1) learn if the benefits of an action are
likely to justify the costs and (2) discover which of
various possible alternatives would be the most cost-
effective.
Source: OMB Circular A-4, “Regulatory Analysis” (2003)

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The What, Why, and How of
Regulatory Impact Analysis
Why:
– Executive Order 12866, Regulatory Planning and
Review
– DOT Rule on Rules
– Statutory Requirements
• Regulatory Flexibility Act (focus on small entities)
• Paperwork Reduction Act
• Unfunded Mandates Reform Act
• Administrative Procedure Act (at a high level)

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The What, Why, and How of
Regulatory Impact Analysis
How:
• To provide a complete RIA, agencies should follow these
steps:
– Describe the need for the regulatory action
– Define the baseline
– Set the timeframe of analysis
– Identify a range of regulatory alternatives
– Identify the consequences of regulatory alternatives
– Quantify and monetize the benefits and costs
– Discount future benefits and costs
– Evaluate non-quantified and non-monetized benefits and costs
– Characterize uncertainty in benefits, costs, and net benefits
Source: OMB Circular A-4, “Regulatory Impact Analysis: A Primer” (2011)

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The What, Why, and How of
Regulatory Impact Analysis
End note:
• “You will find that you cannot conduct a good regulatory analysis
according to a formula.”
• Different regulations may call for different emphases in the analysis,
depending on the nature and complexity of the regulatory issues and
the sensitivity of the benefit and cost estimates to the key
assumptions.
• A good analysis is transparent (reproducible and objective).
– It should be possible for a qualified third party reading the report to see clearly
how you arrived at your estimates and conclusions.
– For transparency’s sake, you should state in your report what assumptions and
data were used, along with sources.
– It is usually necessary to provide a sensitivity analysis to reveal whether, and to
what extent, the results of the analysis are sensitive to plausible changes in the
main assumptions and numeric inputs.
Source: OMB Circular A-4, “Regulatory Analysis” (2003)

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Regulatory Impact Analysis:
Managing Expectations
• Regulatory impact analysis is a “point in time”
estimate of future impacts
– Analysis before the effective date and compliance date
of the rule
– Industry often finds ways to implement requirements
differently, potentially at lower costs
– Typically not viewed as an investment analysis
– Limitations on use of analysis from a historical
perspective
– Typically does not consider effects of future rules and
events

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Typical areas of uncertainties and
methods of treatment
• Typical areas of uncertainties (as seen in recent analysis)
– Forecasting fleet and operations over an extended period of
analysis, especially for new entrants and ops that do not currently
exist
– Costs that are assigned across a large populations and diverse
fleets
– Distribution of costs
• Methods of Treatment
– Sensitivity analysis
• Presents how the benefits and costs of the rule and its alternatives
change under different uncertainty conditions
– Ranges as opposed to point estimates
– Additional bucketing and categorization of costs

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