The civilian drone market was predicted to take off like a rocket. But the market has stalled. The Federal Aviation Administration (FAA) is keeping drone technology bottled up in the U.S. while it continues to move forward in Asia and Europe.

The opportunities for drones are real. Oil companies, electric power utilities, and mobile operators are already using drones to inspect vital infrastructure. Companies including Amazon, Domino’s, and Walmart are serious about putting drones into wider use. Everyone agrees that the industry must prove that drones are safe before they are allowed to deliver small packages to homes. But there is reason to believe that it can be done: Every day in the U.S. there are more than 23,000 commercial airline flights carrying well over 1 million passengers.

For now, the drone market is in a holding pattern. Several drone makers laid off workers over the last 12 months. The FAA recently reported that drone registrations are averaging about 8,300 per week. However, the forecast cited by the FAA in its 2017 annual report would require average weekly sales of more than 23,000 drones.

Many drone companies have tied their fate to a glacial FAA process that could be leading them down a blind alley. While many in the tech press (which moved sharply to the left during the Obama years) blame the layoffs on the growing dominance of Chinese drone maker DJI, Wall Street Journal columnist Gordon Crovitz points out that it was excessive FAA regulation that allowed a Chinese company to run away with the market ("While Amazon Waits, Drones Fly").

The demise of Flytenow offers further evidence that the FAA is an obstacle to innovation. Flytenow operated a flight-sharing website for private pilots, enabling them to offer rides to the public to help defray expenses. The FAA contended that when pilots offer rides online they become common carriers, forcing Flytenow to shut down.

Finding a way Forward

The biggest challenge confronting the drone industry today isn’t safety -- it’s politics. Apparently, we have become so accustomed to federal agencies riding herd over businesses that no one batted an eye when Congress passed the FAA Modernization and Reform Act of 2012, which appointed the FAA to oversee the emerging drone industry. That action was a mistake for two reasons.

First, the FAA primarily manages large manned aircraft that fly long distances and cruise at high altitudes (typically around 30,000 feet). Commercial drones are small and mainly fly short distances at low altitudes (below 500 feet). While the FAA should retain the authority to keep drones at a safe distance from manned aircraft, the FAA has neither the motivation nor the skills to shepherd an emerging tech industry.

Second, the FAA’s mission is to ensure safe air travel. Given that most passenger flights are interstate or even international, it makes sense for the FAA to apply one set of rules to the entire country. In contrast, one-size-fits-all rules do not make sense for drones used in environments as diverse as rural Wyoming and New York City. State and local governments -- in consultation with local citizens, users, and businesses -- should determine when and where the benefits of drone use outweigh the risks.

Despite the apparent good intentions of Chief Administrator Michael Huerta, who publicly called for his agency to be more flexible and “stop moving at the speed of government,” it took the FAA more than four years to create the first rules for small unmanned aircraft. Up until mid-2016, using drones for business purposes in the U.S. was actually illegal, though the FAA began issuing waivers on a case-by-case basis in 2014. The new Part 107 Rules were supposed to open the floodgates to commercial use of drones. In practice, the rules merely codified the uses that were already being granted waivers. The rules reduced the FAA examiners’ workload, but did almost nothing to spur business use.

A quick look at the restrictions contained in the Part 107 Rules reveals why. Drones may not be operated beyond line of sight of the operator, at night, or over people not directly involved in the drone’s operation. That means that drones still can’t be used to examine crop fields on a large farm, patrol a private facility at night looking for intruders, or transport small items between facilities several blocks apart without first obtaining special permission from the FAA. Nor are the restrictions likely to be relaxed anytime soon.

None of this is to suggest that the FAA should have no role in the drone industry. The FAA should remain in charge of keeping drones away from restricted areas such as airports. Otherwise, the FAA could serve as a resource to the states rather than as a national gatekeeper, developing airworthiness guidelines, providing operator training, and helping to field-test new solutions.

Lately there has been much talk in the tech industry about flying cars and small electric aircraft with vertical take-off and landing (VTOL) capability. Proponents say these new forms of air transportation could help alleviate automobile traffic congestion in and around major cities. That’s precisely the kind of thing that gets inventors and entrepreneurs excited. However, if we are going to allow commercial air taxi service for people by 2025 as proposed by Uber, then shouldn’t we figure out much sooner how to permit drone delivery of small packages?

Ira Brodsky is a St. Louis-based consultant and the author of five books about technology. @IraBrodsky