With millions of small drones in private hands, the FAA continues its struggle to develop an effective regulatory regime to comply with Congress’s mandate to integrate them into the national airspace system. Thousands of individuals and small businesses have obtained authorization from the FAA—"section 333 exemptions"—allowing them to fly their drones commercially. Farmers, TV stations, surveyors, construction-site supervisors, real estate agents, people selling their properties, and managers seeking cheaper and safer ways to inspect their facilities, want to hire the exemption holders, but many are holding back until the FAA clarifies the groundrules.

The FAA understands that its traditional approach for testing and licensing pilots, scrutinizing every detail of a new aircraft before it can be flown, and controlling flight operations of helicopters and airplanes have little relevance to the risks presented by small drones. In any event, traditional aviation regulations are unenforceable against tens or hundreds of thousands of drone owners who know nothing about the FAA or the FARs, are not part of the aviation culture, and who fly mainly in their backyards or customers’ parking lots.

Ultimately, the agency will be drawn to regulate drones at the point of sale—to say to Amazon: "you can't sell one of these unless it has certain built-in safety capabilities—unless it is law-abiding out of the box.” The FAA acknowledges that the traditional approach to "airworthiness certification,” which costs tens of millions of dollars and takes years is not the answer for a $1,000 DJI Phantom 3.

Law-abiding drone performance standards must define performance capabilities rather than engineering details; they must allow manufacturers to self-certify compliance—just as they do with computers, Wi-Fi equipment, automobiles, and trucks. Automatic post-sale data transmission by the drones will permit manufacturers and the FAA to analyze actual behavior, thereby refining their understanding of actual, rather than theoretical, risks, and to determine the reliability of automated safety systems. Lawless drones will be subject to recalls in extreme cases, and designers and manufacturers will pay the price in tort liability for reckless decisionmaking.