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December 3, 2013

Amazon.com sees delivery drones as future

NEW YORK — Amazon is working on a way to get packages to customers in 30 minutes or less — via self-guided drone.

Consider it the modern version of a pizza delivery boy, minus the awkward teenager.

Amazon.com Inc. says it’s working on the so-called Prime Air unmanned aircraft project but it will take years to advance the technology and for the Federal Aviation Administration to create the necessary rules and regulations.

The project was first reported by CBS’ “60 Minutes” Sunday night, hours before millions of shoppers turned to their computers to hunt Cyber Monday bargains.

Amazon CEO Jeff Bezos said in the interview that while his octocopters look like something out of science fiction, there’s no reason they can’t be used as delivery vehicles.

Bezos said the drones can carry packages that weigh up to five pounds, which covers about 86 percent of the items Amazon delivers. The drones the company is testing have a range of about 10 miles, which Bezos noted could cover a significant portion of the population in urban areas.

Bezos told “60 Minutes” the project could become a working service in four or five years.

Unlike the drones used by the military, Bezos’ proposed flying machines won’t need humans to control them remotely. Amazon’s drones would receive a set of GPS coordinates and automatically fly to them, presumably avoiding buildings, power lines and other obstacles.

Delivery drones raise a host of concerns, from air traffic safety to homeland security and privacy. There are technological and legal obstacles, too —similar to Google’s experimental driverless car. How do you design a machine that safely navigates the roads or skies without hitting anything? And, if an accident occurs, who’s legally liable?

Delivering packages by drone might be impossible in a city like Washington D.C. which has many no-fly zones.

But technology entrepreneur and futurist Ray Kurzweil notes that “technology has always been a double edged sword.”

“Fire kept us warm and cooked our food but also was used to burn down our villages,” says Kurzweil.

“It’s fascinating as an idea and probably very hard to execute,” says Tim Bajarin, an analyst with Creative Strategies who sees Bezos as an unconventional thinker. “If he could really deliver something you order within 30 minutes, he would rewrite the rules of online retail.”

Amazon has already done that once. In 1995, with investments from family and friends, Bezos began operating Amazon as an online bookseller out of a Seattle garage. Over nearly two decades, Amazon grew to become the world’s largest online retailer, selling everything from shoes to groceries to diapers and power tools.

Amazon spends heavily on growing its business, improving order fulfillment and expanding into new areas. Those investments have come at the expense of consistent profitability, but investors have been largely forgiving, focusing on the company’s long-term promise and double-digit revenue growth.

The company spent almost $2.9 billion in shipping last year, accounting for 4.7 percent of its net sales.

There is no prohibition on flying drones for recreational use, but since 2007, the Federal Aviation Administration has said they can’t be used for commercial purposes.

“The technology has moved forward faster than the law has kept pace,” says Brendan Schulman, special counsel at the law firm Kramer Levin Naftalis & Frankel LLP.

Schulman is currently challenging that regulation before a federal administrative law judge on behalf of a client who was using a radio-controlled aircraft to shoot video for an advertising agency. Autonomous flights like Amazon is proposing, without somebody at the controls, are also prohibited.

The FAA is slowly moving forward with guidelines on commercial drone use. Last year, Congress directed the agency to grant drones access to U.S. skies by September 2015. But the agency already has missed several key deadlines and said the process would take longer than Congress expected.

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