By: Charlton Evans, Autonomy Global Ambassador – Certification
Author’s Note
This article was drafted in early January 2026, immediately following the FCC’s expansion of its Covered List to all foreign drones and critical components. In the weeks since, the regulatory landscape has continued to evolve at the rapid pace we predicted. What follows is the original analysis, with addendums documenting subsequent developments that underscore both the uncertainty facing the industry and the feedback mechanisms now engaging. These updates illustrate exactly what we meant when we wrote: “I believe this is all going to change again in weeks. It is going to be a saga that the industry has to endure to survive.”
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The commercial drone industry woke up on a late December morning to find its business models fundamentally disrupted when the FCC expanded its Covered List to all foreign drones and components. I interviewed Jodi Goldberg of Pillsbury Winthrop Shaw Pittman and Nate Ernst of The Tactien Group on this development. Collectively we’ve spent years helping companies navigate the intersection of innovation and regulation. I thought that “cut off at the root” captured both the administration’s methodology and the predicament now facing an industry that has spent a decade moving from hobby grade technology to essential tools for critical infrastructure, first responders and law enforcement. Let’s break it down.
Goodness, Caveated
The understated goals of the FCC Notice enjoy widespread support with objectives that resonate: to onshore drone manufacturing capability, secure supply chains and build domestic technological dominance. I am all for onshoring. I am all for drone dominance and the intent of bringing it all here.
I have one huge caveat, which also defines the current crisis: the unintended consequences of this notice are massive for the commercial sector.
Those consequences have already started reverberating through utility companies managing millions of miles of transmission lines, rural police departments that finally gained aviation capabilities and service providers whose entire business models rest on equipment they can no longer acquire or maintain.
A Confusing Mechanism
The regulatory mechanism itself introduced confusion from the outset. Jodi Goldberg, a telecommunications attorney working through the implications of the FCC’s actions with multiple clients, noted that “The public notice introducing the foreign UAS covered list created unnecessary uncertainty by suggesting it would apply to all UAS and UAS critical components imported and sold in the U.S. market, including government procurement.”
That broad phrasing forced the Department of War to clarify it operates outside FCC jurisdiction. “The DoW clarification is in line with Covered List regulations, which apply predominantly to commercial entities, regulated by or seeking funding from the FCC,” Goldberg explained.
That distinction, between federal procurement and commercial operations, has proven critical. State and local government entities, despite serving a governmental purpose, come under the FCC’s regulatory purview in most instances.
“It is important to remember that if you are selling to state and local, they are (for the most part) considered purchasers of commercial goods and services,” Goldberg clarified. Rural police departments and municipal utilities that have integrated drones into their operations typically face the same regulatory constraints as other commercial entities, without access to the federal exemptions often available to defense contractors.
The Broad Scope Was Unanticipated
The scope of the Covered List entry also extended far beyond what many anticipated. Most initially planned for prohibitions aimed at certain Chinese drone manufacturers. Instead, the implications of expanding the Covered List broadly, to all foreign UAS and components, appears set to cascade through an industry that has been relying on subsystems almost exclusively imported. The same industry has also been steadily building toward Advanced Air Mobility (AAM). Now, it appears the industry may have been building on a foundation that has been curtailed by the FCC’s administrative action.
The Costs Don’t Make Cents
The costs to several important sectors came into sharp focus with concrete numbers when I spoke with Nate Ernst, who has worked extensively with utility companies and public safety organizations (and is the Autonomy Global Ambassador – Energy).
Energy & Utilities
Ernst explained, “The United States has approximately 500,000 miles of electric transmission lines and another 5.5 million miles of distribution lines, totaling more than 6.5 million miles of electric infrastructure overall.” These systems were traditionally inspected “by helicopter and foot. It worked. It was expensive.” Drones enabled cheaper, more frequent inspections that represented fundamental improvements in infrastructure maintenance and grid reliability. That capability is now in jeopardy for companies holding fleets of aircraft that cannot be easily replaced.
Ernst’s assessment of the power grid’s vulnerability underscores why this matters. “You would be absolutely amazed at how fragile our power system is. It only takes the right combination of a few lines to trip, and half the eastern seaboard loses power for a week.” The role of drones in preventing such scenarios is direct and measurable. “Instead of spending $30,000 to mobilize a Bell 206 weeks from now, they’re flying within the hour with a small UAS to inspect those lines for multiples in terms of cheaper cost.”
Ernst described how utilities once relied heavily on helicopter-based inspections with budgets as high as $80 million. “Over the past decade, those budgets have come down to closer to $10 million as companies shifted toward lower-cost alternatives like small unmanned aircraft systems,” he said. “Once you’ve proven the work can be done for roughly one-eighth the cost, going back and asking for that original budget is not going to be received well.”
“You’re essentially saying, ‘Remember that $80 million inspection budget from ten years ago? I need that again, or at least a large portion of it,’” Ernst added. “The answer is going to be no.”
According to Ernst, the result is an unavoidable choice between accepting a growing reliability gap in critical infrastructure or acknowledging that maintaining modern electric systems under these constraints may justify rate increases, even as customers already face expensive power bills.
Public Safety
Public safety faces parallel challenges. Ernst noted that “80% of law enforcement agencies in this country had no direct access to aviation units” two decades ago. The democratization of drone capability changed that fundamentally. “Now you have rural police departments having their own aviation units providing life-saving public safety use cases every single day.” The price differential tells the story: “If they can’t afford to buy an aircraft that once was $1,500, if it now costs 30,000. It’s not going to happen.” Capabilities that “have increased safety or lowered crime for years” face an abrupt end.
DSPs
The commercial drone service provider sector confronts an immediate existential threat. Ernst describes working with “a company in the renewables industry with 300 DJI docks across the lower 48 running asset inspections seven days a week. Their entire business model has been predicated on DJI docks.” The economics don’t allow simple equipment substitution.
“Their business model as a service provider has been, ‘I’m going to charge you $1,000 a month because it only cost me $700 a month for that box.'” Switching to domestic alternatives costing tens of thousands of dollars per unit would require complete business model reconstruction at a scale the market may not support. Ernst’s assessment: “If you’re a small service provider you’ve just been dealt a blow that could very well be a KO.”
Domestic Alternatives?
The challenge of building domestic alternatives runs deeper than factory construction. “We offshored all of the lower technical work to other countries,” Goldberg explained. “We prioritized manufacturing highly sophisticated military drones here and purchasing lower-grade, cheaper commercial products from countries focused on mass-produced manufacturing.” That offshore work didn’t remain low-grade. “Those countries got more sophisticated by having access to the low sophistication things. We don’t have that.”
The engineering talent and manufacturing infrastructure required to produce commercial-grade autonomous systems at competitive prices represents years of development work. Even companies with onshoring plans find themselves scrambling. “There’s a lot of companies that have five-year roadmaps. Now we’re scrambling,” Goldberg reported. “There’s more to it than just building a factory…” These challenges are not insurmountable, but time may now be the scarcest resource.
Paths Forward
The waiver and exemption process offers a potential path forward, but its viability remains uncertain. For those seeking to use foreign UAS or critical components “The waiver process is mandatory, requiring disclosure to the U.S. government of extensive private company information such as ownership, citizenship, supply chains and plans to become a US company, all without any specified timelines for approval,” Goldberg explained.
The lack of timeline guarantees creates cascading uncertainty. “Do you have to get this approval before you can participate in an RFP?” For companies attempting to plan operations or respond to procurement opportunities, the answer to that question could determine business viability.
Beyond immediate waiver challenges lies the infrastructure question few have fully grappled with. “Aside from a single C2 band, we don’t have assigned spectrum for commercial UAS operations in the United States. Commercial UAS have been mostly limited to low power, unlicensed operations,” Goldberg pointed out. “What are the expectations for scaling UAS component manufacturing here for the expanded and growing UAS applications? You eventually have to find bands for these commercial operations. But we haven’t identified that spectrum yet.” Building that spectrum pipeline while simultaneously rebuilding manufacturing capability represents a multi-year effort.
The path forward requires immediate action, even amid regulatory uncertainty. “I think operators should be auditing their inventory. This isn’t just about N-numbers. It’s every aircraft’s command-and-control links, radio configurations, payload networks and communications architecture,” Ernst advised. “Start talking to your suppliers and ask what they’re doing. And if you don’t get good answers, start talking to your OEMs.”
Information gathering happens parallel to advocacy. This is all ultimately about onshoring manufacturing. “Use U.S. components where possible, start the qualification process for waivers early and try to submit components for class exemptions en masse,” Goldberg recommended. The feedback mechanism offers hope for iterative improvement. “This is going to be a learning curve. The exemptions are for a year. So this process is a first cut and feedback based,” Goldberg explained.
Pressure, Time and An Uncertain Future
Pressure for change is likely to come from predictable quarters. “If first responders and law enforcement are saying there’s a big problem with their ability to do their job, there’s going to be a response,” according to Goldberg.
But the timeline for resolution remains uncertain. “I think more exemptions will come with time and with more experience implementing the waiver process,” Goldberg predicted. The expectation of continued evolution is universal.
As for me, I believe this is all going to change again in weeks. It is going to be a saga that the industry has to endure to survive.
The core issue, as Goldberg articulated it, transcends specific mechanics. “The core issue is the lack of regulatory predictability, which is making everything difficult.”
Industries can adapt to almost any regulatory framework, given time and certainty. What proves more difficult is adapting to a framework that remains in flux while simultaneously requiring immediate operational decisions. The collision between the administration’s change-agent approach and the operational realities of companies managing critical infrastructure creates this current crisis.
What grows back from this particular pruning will determine whether the commercial drone industry that emerged over the past decade can survive in recognizable form, or whether it must be rebuilt from scratch under constraints that make its previous economics impossible.
The answer matters not just to manufacturers and service providers, but to the utilities keeping the lights on, the police departments responding to emergencies and the infrastructure that supports modern life. Those stakes make the current regulatory uncertainty more than an industry challenge. They make it a test of whether we can rebuild critical capability fast enough to avoid creating the vulnerabilities we sought to eliminate.
ADDENDUM I: Software and Firmware Updates Extended (January 23, 2026)
The FCC’s Office of Engineering and Technology announced its first significant clarification addressing immediate operational concerns for existing fleets. In a notice that provided critical near-term relief, the FCC stated:
“The Federal Communications Commission’s Office of Engineering and Technology (OET) announces that certain prohibitions contained in 47 CFR §§ 2.932(b) and 2.1043(b) will not apply for now to certain UAS and UAS critical components. All UAS and UAS critical components authorized for use in the United States may continue to receive software and firmware updates that mitigate harm to U.S. consumers at least until January 1, 2027. These include all software and firmware updates to ensure the continued functionality of the devices, such as those that patch vulnerabilities and facilitate compatibility with different operating systems.”
This update addresses one of the most immediate operational concerns raised by the industry: the ability to maintain existing fleets through security patches and compatibility updates. The January 1, 2027 deadline provides a defined window for software maintenance, though it does not resolve the underlying equipment replacement and supply chain challenges. This represents exactly the type of iterative refinement that Goldberg predicted would emerge through feedback, though the one-year timeline maintains pressure on operators to develop longer-term transition strategies.
ADDENDUM II: DJI and Autel Challenge FCC Authority (January 21-22, 2026)
Both DJI and Autel Robotics filed formal challenges to the FCC’s actions, questioning the legal basis for their inclusion on the Covered List.
DJI’s Position: On January 22, 2026, Travis LeBlanc filed a Petition for Reconsideration on behalf of SZ DJI Technology Co., Ltd., arguing that the FCC did not have proper authority to add DJI to the Covered List. The petition’s core argument centers on a procedural issue: the National Defense Authorization Act (NDAA) required a national security determination before entities could be added to the Covered List, and DJI was not specifically mentioned in the National Security Determination (NSD) that created the broader foreign UAS ban.
Autel’s Position: On January 21, 2026, Fan Liang and Zhiyu Liang filed an Application for Review on behalf of Autel Robotics Co., Ltd., challenging the Commission’s actions across the same regulatory framework.
Both companies filed identical challenges across three separate FCC dockets:
- WC Docket No. 18-89 (FCC Programs)
- ET Docket No. 21-232 (Equipment Authorization Program)
- EA Docket No. 21-233 (Competitive Bidding Program)
These legal challenges introduce a new dimension of uncertainty. If successful, they could potentially narrow the Covered List back to the original foreign UAS category while removing the company-specific bans on DJI and Autel. However, the legal process will take months to resolve, during which the existing restrictions remain in force. This procedural challenge highlights the administrative complexity that characterized the initial rollout—the distinction between entities banned under the NDAA (DJI, Autel) and entities restricted under the broader foreign UAS determination may prove legally significant.
ADDENDUM III: Public Comment Period Opened (January 29, 2026 – April 6, 2026)
On January 29, 2026, the FCC published Public Notice 3232, formally accepting the DJI and Autel petitions and establishing a public comment period.
Key Dates:
- January 29, 2026: Public Notice published
- April 6, 2026: Opposition deadline (60 days from Federal Register publication)
- May 6, 2026: Reply deadline (30 days after opposition period)
Opportunity for Industry Input: This formal comment period represents the mechanism that Goldberg identified as crucial for industry feedback. The 60-day opposition period provides an opportunity for affected parties—utilities, public safety organizations, service providers, and manufacturers—to formally document the operational impacts described in this article.
This comment period is where the data Ernst recommended collecting becomes critically important. Organizations that have completed the inventory audit Ernst advised—documenting every aircraft, C2 link, and radio payload affected—will be positioned to provide concrete, quantifiable impacts during the opposition period. The predictions we made about pressure coming “from predictable quarters” including first responders and critical infrastructure operators can now materialize as formal opposition filings.
The three-month process (late January through early May) means preliminary decisions on the DJI/Autel challenges could emerge by mid-2026, though final resolution will likely extend beyond that timeframe.
Conclusion: The Saga Continues
These developments, occurring within weeks of the original Covered List expansion, validate our central thesis: regulatory predictability remains elusive, and the industry must navigate an evolving framework while making immediate operational decisions. The software update extension provides breathing room. The legal challenges introduce uncertainty. The comment period offers a formal mechanism for the industry impact documentation we advocated.
What happens next depends significantly on the quality and comprehensiveness of industry feedback during the April comment period. Organizations that heed Ernst’s advice to audit their operations and document concrete impacts will be best positioned to inform the regulatory evolution that continues to unfold.