Alphabet, Apple and Microsoft will be part of government drone pilots, but Amazon was left out


The U.S. Transportation Department's 10 winning drone pilot projects aimed at spurring the use of unmanned aerial vehicles in a wide variety of fields do not include Amazon or China's DJI, but do involve Alphabet, Qualcomm and Microsoft. Apple is also involved in the project through a partnership with the North Carolina Department of Transportation.

Virginia Tech, one of the winners, said that Alphabet's Project Wing, AT&T, Intel, Airbus and Dominion Energy are among the partners for its pilot program that will explore package delivery, emergency management and infrastructure inspection.

A spokesman for the North Carolina Department of Transportation, another winner, said Apple Is among its partners, and Apple said it plans to use the testing program to improve Apple Maps by capturing aerial images.

"Apple is committed to protecting people's privacy, including processing this data to blur faces and license plates prior to publication," the company said.

Microsoft is among the partners for a Kansas project, while Qualcomm is joining a winning bid from the City of San Diego to test a wide range of public safety, commercial and emergency response applications.

Amazon, which hopes to one day deliver packages with a fleet of drones, said it was unfortunate its applications were not selected but supports the U.S. efforts.

"We're focused on developing a safe operating model for drones in the airspace and we will continue our work to make this a reality, said Brian Huseman, Amazon's vice president of public policy.

China's DJI said it submitted about a dozen applications.

"We congratulate the winners and will be happy to work with any of them with hardware, software or technical assistance to help these exciting ideas come to life," said Adam Lisberg, spokesman for the world's largest maker of non-military drones.

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Rules needed for people, backyards

The pilot program is aimed at producing data to assist the Federal Aviation Administration in establishing rules and regulations to safely integrate drones at scale. The FAA still must decide questions before the pilot projects begin including whether drone deliveries should follow city streets or cross backyards.

The 10 pilot drone test projects selected from 149 applications are in California, Tennessee, North Dakota, Nevada, Kansas and other states.

Nevada-based Flirtey, a drone delivery startup, said it was a partner on four of the winning applications including Virginia Tech's. Flirtey said in a statement that it and government partners "will now have access to fast-tracked regulatory approvals as they work to expand lifesaving drone delivery operations."

U.S. Transportation Secretary Elaine Chao said that drone use is surging. She said the administration must "create a path forward" to ensure the safe integration of drones.

She said there are "no losers" and she thinks dozens of the applicants not chosen could be greenlighted by the FAA in the coming months.

Asked why the Transportation Department had not selected Amazon or DJI, Deputy Transportation Secretary Jeff Rosen told Reuters that the projects had gone through a rigorous review process. "There were no losers -- only winners," Rosen said. "This is an important first step in the process of drone integration."

Memphis Airport Authority Chief Executive Scott Brockman told Reuters that it had also been picked and that its partner FedEx will use drones to inspect aircraft at its hub in Tennessee as well as parts deliveries for aircraft and some package deliveries between the airport and other Memphis locations. Another partner is General Electric, he said.

Earlier, the department confirmed it had sent two planned rules to the White House to regulate the increased use of unmanned aerial vehicles.

One rule submitted would allow drones to fly over people while another proposal submitted would allow for remote identification and tracking of unmanned aircraft in flight. After both are formally proposed, it would take months or possibly more than a year before they are finalized.

Current rules prohibit nighttime drone flights or operations over people without a waiver from the FAA. The FAA has no requirements or voluntary standards for electrically broadcasting information to identify an unmanned aircraft.

The FAA has said regulations are necessary to protect the public and the National Airspace System from bad actors or errant hobbyists. Several incidents around major airports have involved drones getting close to aircraft.

The wide interest in the U.S. initiative, launched by President Donald Trump last year, underscores the desire of a broad range of companies to have a say in how the fledgling industry is regulated and ultimately win authority to operate drones for purposes ranging from package delivery to crop inspection.

Additional editing by CNBC.