On June 30, 1956, two airliners flying over the Grand Canyon collided. All 128 passengers and crew aboard the planes perished. It was the first U.S. air disaster with more than 100 fatalities. The accident made clear that the nation's burgeoning air-travel industry needed better safety oversight. Citing the "tragic losses of human life," President Dwight D. Eisenhower signed legislation creating the Federal Aviation Administration in 1958.

Six decades and a zillion regulations later, the agency that supervises everything from air-worthiness to passenger gadget use has taken legal action for the first time against an on-ground pilot – an operator of a styrofoam, 4.5-pound Ritewing Zephyr-powered glider. The $10,000 levy (.pdf) invokes the same code section that governs the conduct of actual airline-passenger pilots, charging modeler Raphael Pirker with illegally operating a drone for commercial purposes and flying it "in a careless or reckless manner so as to endanger the life or property of another."

Pirker is fighting the citation (.pdf) before the National Transportation Safety Board, challenging the FAA's assertion that it has the power to supervise the use of unmanned drones. If Pirker prevails, the FAA's 2007 ban on the commercial use of unmanned drones – a thriving overseas business – may be nullified.

Pirker's legal battle throws a spotlight on a commercial drone scene in the United States operating in a grey area. The FAA has issued dozens of cease-and-desist letters to operators of commercial model aircraft, forcing some companies to shut down. Others, however, are performing their aerial filming and crop and real estate surveying businesses underground – or sometimes right in the open.

The agency is working on a set of regulations for the budding industry, but those rules won't be unveiled until as early as 2015. Meanwhile, uncertainty reigns.

Pirker's lawyer maintains that the 2007 ban on commercial drones is invalid because the FAA failed to hold public hearings before issuing the rule. "There is no enforceable federal regulation concerning the operation of a model airplane," says the attorney, Brendan Schulman of New York.

The term drone – appropriated from the military's unmanned aerial vehicles – is relatively new, but model air-planing has a long history. Just 20 years after the Wright brothers' first flight, the nation's first National Aeromodeling Championships were held in 1923. The American Academy of Model Aeronautics, of Muncie, Indiana, boasts some 170,000 members today.

"The first time you fly one of these things, you're whole body thinks it's flying," says Pirker, who runs TBS Avionics, a Hong Kong-based drone parts supplier.

Pirker, 28, has captured dramatic footage over Rio De Janeiro, the Golden Gate Bridge and the Statue of Liberty, among dozens of other famous and not-so-famous locations.

His FAA legal troubles began when he was on the job for the public relations firm Lewis Communications in 2011. His assignment: Capture images over the University of Virginia. The resulting video takes viewers on a wild ride, and the FAA's citation says that it amounts to a series of violations – flying too low over vehicles, buildings, people, streets and structures, and even aiming the craft at a person.

That was his spotter, Pirker says.

Laura Brown, an FAA spokeswoman, declined comment but forwarded a February "Fact Sheet," that cites safety as a main reason for barring the commercial use of what it calls Unmanned Aircraft Systems. The rules don't apply to hobbyists, even if they're using the very same planes.

To Pirker, that makes no sense.

"How come the flight is less dangerous if you're not receiving any compensation for it?" Pirker asks.

Until 2007, the industry and hobbyists were operating under a 1981 FAA "Advisory Circular" (.pdf) that did not distinguish between hobbyists and the commercial use of what the government at the time called "model aircraft."

Among other things, the circular "encourages voluntary compliance" with safety standards. Among them, the circular recommends flying below 400 feet – to avoid flying in the proximity of "full-scale aircraft" – and using "observers to help if possible." The guidelines also suggest selecting flying locations "away from noise-sensitive areas such as parks, schools, hospitals, churches, etc."

The circular does not define model aircraft, but the 2007 Federal Register entry does – with a definition so broad as to border on meaninglessness.

"They range in size from a wingspan of 6 inches to 246 feet; and can weigh from approximately 4 ounces to over 25,600 pounds. The one thing they have in common is that their numbers and uses are growing dramatically," the Federal Register states.

The FAA has blessed a number of law enforcement and public safety uses for drones, from fire suppression efforts to border security to search-and-rescue missions.

Schulman says the FAA cannot simply declare a regulation without having a public notice-and-comment period. His argument goes like this: Congress has delegated to its bureaucracy the authority to make rules, but when new regulations have a substantial impact on the general public, the government must have hearings and take comments.

That didn't happen in this instance, Schulman says. That means the government is wrongly enforcing a ban on the commercial use of drones in the United States, and the $10,000 fine against Pirker cannot, therefore, be enforced, he says.

Schulman is running up against an area of federal law known as the Administrative Procedures Act, which is designed to put a check on the vast powers Congress has granted to federal agencies.

Among the last times the bureaucracy was dinged for breaching the Administrative Procedures Act was in 2011, when a federal appeals court said the Department of Homeland Security broke the law with its 2009 decision to make "nude" body scanners the "primary" security apparatus at the nation's airports.

The U.S. Court of Appeals for the District of Columbia Circuit ordered the TSA to have public hearings and to take public comments about the rule change. But the court allowed the TSA to continue using the scanners anyway, all in the name of the war on terror. If such hearings end up being held regarding commercial drones, the public comments (and the agency's answers to them) will be reviewable by a court, which could open the FAA up to even more legal challenges.

Meanwhile, big money is on the line.

The Association for Unmanned Vehicle Systems International, an industry lobby, says the United States is losing billions in revenue and thousands of jobs because of the ban.

According to its March report, "The Economic Impact of Unmanned Systems Integration in the United States," the commercialization of drones would add 34,000 manufacturing jobs in the next three years and 70,000 new jobs overall in the same time period. The overall economic impact equates to $82.1 billion between 2015-2025, according to the report.

"The main inhibitor of U.S. commercial and civil deployment of the UAS is the lack of a regulatory structure," the report notes.

The National Football League has been lobbying for legalization, and the Motion Picture Association of America says that the ban is crimping film production in the U.S., and even making production more dangerous.

"Unmanned aerial devices – essentially remote-controlled helicopters – offer an innovative, safer and much less expensive option for shooting scenes than renting a full-scale manned helicopter," spokeswoman Kate Bedingfield says. "They allow for creative aerial shots without putting anyone at risk and are frequently used on film sets overseas. We are hopeful that we can work with the FAA to implement their safe commercial use in the United States in the near future."

Chris Anderson, WIRED's former editor who now runs drone-maker 3DRobotics of California, says he has sold thousands of fixed-wing and multicopters to hobbyists across the globe. He says his biggest commercial clients are in Europe, Australia and Latin America.

"We didn't get into this to be a hobby," he said. "We think it's the future of aviation."

Much of the commercial work is being done overseas by farmers who are surveying their crops and soil, a practice Anderson calls "precision agriculture."

"Today, with big ag, it's too big," he said. "Farmers just don't know what's going on in the field."

Several companies advertising the commercial use of drones in the U.S. declined to speak on the record with WIRED.

EideCom Water Sports from EideCom on Vimeo.

However, Charles Eide, who owns Minnesota-based commercial filming venture EideCom, says the FAA recently called him, demanding that he stop performing commercial services with unmanned aircraft and to quit advertising about it.

He's invested some $70,000 into 10 drones. In a creative workaround, he maintains that he's not actually offering commercial unmanned aircraft services.

"Instead of charging, we will simply include it pro bono for working with us," he said. "It's just another benefit of working with our company."

Homepage Image: Eric Risberg/AP