In the never-ending quest to add yet another candidate for the “Next Big Thing” technology list, drones are looking like a solid choice.

For the first time, investment in drone companies exceeded $1 billion in 2017 and when the Federal Aviation Authority opened a commercial drone pilot licensing program late last year, 300 new operators were signing up every business day.

These numbers are enticing big companies to join the drone gold rush. Intel Corp. has made major investments to build and market its own line of commercial drones. Verizon Communications Inc. launched Airborne LTE Operations last year in an effort to woo drone operators to use its wireless network. Even the power tool company Black & Decker Corp. has entered the market, selling drone-based security systems to guard the front door.

Flights over people raise concerns

But the drone industry is also facing tremendous challenges. In the absence of Congressional action, state and local governments in the U.S. are seeking to limit Unmanned Aerial Vehicle flights, especially over heavily populated areas or “sensitive” locations such as schools and stadiums. And the terrorist threat looms large.

“The federal government is worried about three classes of people: the careless, the clueless and the criminal,” said Lisa Ellman, partner at the law firm of Hogan Lovells, who spoke this week at the Drone World 2017 conference in San Jose, California.

Careless? Ellman described one pilot who lost control of his drone and flew it onto the runway at Chicago’s Midway Airport. The pilot showed up at the airport asking for his drone back and was given an express trip to the city jail instead.

Clueless? At a recent technology event, Martin Gomez, director of aeronautical platforms at Facebook, came across a UAV pilot who proudly showed off a superb aerial photo of the social media giant’s Silicon Valley campus. Did the photographer know that his drone-produced photo was taken in Class D restricted airspace where UAVs are prohibited? “It was like I was speaking Bulgarian,” Gomez said during at panel session at the Drone World event.

The criminal area is perhaps the most significant and sinister. One current growth segment in the drone technology space involves not launching UAVs, but protecting against unmanned aerial vehicle attacks. Citadel Defense offers an automated UAV defense system which monitors and detects aerial threats. The firm’s customers include sports stadiums, which are especially concerned about such potential attacks.

Potential for terrorist attack

Is this threat real? A recent story in the Los Angeles Times documented how a unit of Islamic State pilots flew multiple groups of medium-sized drones that streamed video and dropped crude explosives. “We’re learning how the bad guys are actually using these drones to do surveillance work or put bombs on them to be dropped,” said Daniel Magy, founder and chief executive of Citadel Defense.

Rising drone use is pressuring the U.S. government to take action. At the Drone World conference, attendees heard from Michael Kratsios, deputy U.S. chief technology officer at the White House. The special assistant to the president expressed disappointment in the lack of regulatory guidance. “Other countries are not afraid to race ahead when it comes to drone operation and regulation,” Kratsios told the gathering. “This is a top priority for this White House.”

The main problem confronting the drone industry is that although the FAA owns and controls the nation’s airspace, state and local governments all want a say in how it is going to be used. More than 4,000 pieces of legislation have been introduced at the state level challenging the FAA’s authority, according to Peter Dumont, president of the Air Traffic Control Association. “There are a lot of issues that we have to deal with locally before we can expand globally,” Dumont said.

Waiver process slow

Despite the regulatory gridlock, commercial drones are still being flown in limited numbers. After the FAA allowed drone operators to fly in a visual light of sight below 400 feet during daylight hours starting last year, it has granted more than 1,000 waivers for nighttime use as well.

Industry observers are still frustrated over the slow pace. “The waivers take a lot of time and are really just a Band-Aid approach,” said Gretchen West, a member of the Unmanned Aircraft Systems Group at Hogan Lovells in Silicon Valley. “Clearly the FAA is working hard, but they’re just not moving fast enough.”

Meanwhile, a growing number of companies, such as Intel, are developing new drone technologies for an eager market. The chipmaker designed and manufactured two commercial drones for pipeline and cell tower inspections. The company has also released a third model – the Aero – which runs on the open-source Linux platform and is tailor-made for developers.

It may seem unusual for one of the world’s leading chipmakers to be in the unmanned aerial vehicle business, but there is a simple reason: data. Today’s drones are massive data gathering platforms and this has companies salivating over the prospect of being able to cultivate a rich trove of information for future use.

One Intel executive estimated that one flight could generate 100 gigabytes of data, and a fleet of 75 drones could collect over 18 terabytes in a single day. “We look at this as a huge platform to generate amazing amounts of data,” said Anil Nanduri, vice president and general manager of the Intel Drone Group.

Facebook is in the drone business too. Its Aquila drone, still in the pilot testing phase, is designed to provide connectivity to the Internet in remote areas, while also gathering data as it flies. “Our job is going to be as unobtrusive as possible,” said Facebook’s Gomez. “We want to use aircraft to connect people.”

Although there was a clear sense of frustration over regulatory roadblocks among drone industry leaders at the conference, there was also optimism that the issues will be resolved and the UAV community will flourish.

“It’s a really good technology stack to build here,” said Jonathan Evans, co-president of Skyward, a software company that is supplying drone technology for Verizon. “Aviation is truly being shepherded into the digital age.”

Photo: SiliconANGLE