H.R. 2864 Functionally Bans Operation of All DJI Drones in U.S.
Please note: This is not legal advice, this is ADI’s opinion on this matter - consult an attorney before making any decisions related to this article
When speaking with people across the drone industry, there are a variety of conflicting narratives regarding the consequences of H.R. 2864. This seeks to declaratively address the two major misconceptions: that more companies than DJI are covered and that extant drones would be permitted to continue operating. While the House NDAA included a very similar set of provisions, the Senate’s version of the NDAA did not include them but did muddy the waters on the topic.
H.R. 2864 only bans DJI from operating in the United States – It is clear from the language of the bill that only DJI is impacted by this bill if it passes.
H.R. 2864 bans new purchases of DJI and bars already purchased DJI drones from operating in American airspace.
The misconception that existing DJI’s may still be able to be used may be rooted in the fact that the language of 47 U.S.C. § 1600-1609 only makes it illegal to purchase covered products if the purchaser received federal funds directly. That provision was included because, originally, this list was meant to only address communications hardware and software which was imbedded in national communications networks, and all competitors in that space receive some degree of federal subsidy (similar to power utilities). However, the regulatory process did not end there.
While the original bill did not ban all equipment outright, as part of a stepdown for the communications industry, in 2023, the FCC updated their regulations, through Notice and Comment Rulemaking. The 2023 update effectively banned all equipment from operating in the U.S. in the following manner: (1) covered equipment was required to seek explicit authorization to persist and could not continue to operate under any exemptions, and (2) the FCC concurrently made a rule prohibiting covered equipment from obtaining authorization.
By requiring all covered equipment to seek authorization, and barring themselves from granting authorization, any equipment named on the list is prohibited from being imported, marketed, sold, or operated in the United States. (FCC 22-84A1, pg. 40, #99; § 2.903 amendment pg. 130).
Therefore, in our non-legal opinion, a DJI product violates the FCC’s regulations when it begins broadcasting any signal within the FCC’s jurisdiction. Because both the remote and the drone send signals seeking to pair with each other, to turn on a DJI drone would violate the FCC’s rules once they are added to the list. ADI recommends anyone who intends on violating Federal Laws and Regulations to seek the advice of a legal professional regarding the consequences of such action.
What is the Entities List?
The FCC's Banned Entities List under 47 U.S.C. § 1600-1609 is a list of entities that are prohibited from acquiring, importing, or exporting telecommunications equipment or services in the United States. These entities are typically designated as a threat to national security.
Impact Beyond DJI?
Anzu Robotics - A nominally American company called Anzu Robotics have been offering what were, fairly self-evidently, extremely similar drones to those sold by DJI in response to the proposed ban. Anzu opening contemporaneously with the introduction of HR 2864, their apparently blatant patent infringement without challenge from DJI raised questions about their independence from DJI, and resulted in a near-instantaneous letter from the House indicating that their effort to exist separate from DJI is not working very well. To be clear, ADI wishes all entrants to the market the best, and would rather have DJI or DJI-analogs in the US market, but as part of our educational efforts, we want to make clear to readers how various companies are related.
Probability of other Chinese drones being banned - Pragmatically, the same logic that drove DJI’s ban doesn't apply directly to other drone companies because how much of the focus was on the ubiquity of DJI. While other Chinese drones will take their place in the traditional consumer market, it is not directly clear that the same company that ‘replaces’ DJI as the cost-effective overall market leader will be the new leader in the ag-drone space specifically. Autel and XAG, the two most competitive Chinese agricultural drones outside of DJI are not the only leaders in the Chinese drone space. Further, given the CCP’s approach to business and IP, it is not-unlikely that a ‘new’ drone company appears in mainland China with a new facade but powered by all of DJI’s institutional knowledge and underlying engineering.
However, it's not difficult to extrapolate that whoever replaces DJI as the largest Chinese supplier of drones to America, will eventually be placed on the Entities list, because fundamentally, the data concerns are not rooted in DJI qua DJI. They're rooted in the CCP and PLA’s approach to corporate privacy. This is most significant to us as an industry, not because we support the unilateral ban of all Chinese drones. Instead, it is as an observation that when legislation such as H.R. 2864 comes up, it is something that needs to be capitalized by the industry – momentum in congress is so rare, killing something can be not-just a waste of energy but a waste of an opportunity. Instead of trying to fight bills that are oppositional to our industry as a binary, we should instead frame it as an opportunity to be capitalized on, and take the wins we can get instead of cutting off your nose to spite your face.
See our post ‘H.R. 2864 - What Could We Have Done Better?’ for more information