Links : United States of America

Feb. 23, 2015

Breaking news

The theme of the relationship between regulation and innovation finds every day new illustrations. The example of the drone is particularly noteworthy.

Indeed, the drone is a technical object that moves in the air without being driven in an immediate way by the hand of man.

The legal mechanism of qualification brought the drone in the category of "aircraft" and submit it to the regulatory power of the civil aviation regulator.

The regulation of civil aviation is primarily a safety regulation, not a regulation of the sector's economic deployment.

This is why regulators have taken restrictive positions on drones used for commercial purposes, to the extent that the presence of human beings, most the pilots, are the condition for the safety of people. The fact that the drones fly with "no one" led to consider as a danger a prior, which led regulators to take restrictive measures on flying drones for commercial purposes, restricton consistent with the regulator's intervention criteria, without taking into account external rules, such as the protection of privacy.

But whatever the sector, regulators see themselves increasingly as economic regulators. If we adopt this perspective, a restrictive approach appears to be nonsense.

In the interests of balance in both approaches, the safety of people and the economic development through innovation, the US civil aviation regulator, the Federal Aviation Administration is developing new rules.

February 11, 2015, Federal Aviation Administration raised the need for a legal framework for commercial drones. The reason for this is economic. As it writes: "It is anticipated that this activity will result in significant economic benefits" Indeed, Article 333 of the 2012 ACT of modernization and reform  imposes registration procedure for every commercial unmanned flying object in the sky!footnote-28. But this hinders business development, and therefore the incentive to technical innovation drone.

It was necessary to find a balance between security of persons and lifting of barriers to economic development. This is why the FAA will distinguish between "small" and other drones. The former are particularly useful in agriculture. To the extent that the former do not constitute danger to persons, an exemption from this procedure (Article 333 exemption) may be given concerning them.

One can analyze this evolution of air Regulation in two ways. First, it is for air regulator to take into account fundamental innovation of flying machines with "no one": innovation will be the base of a huge market for which strict regulatory rules could have been the troublemaker. The consideration of the safety of people remains since only drones "small" are allowed. In addition, they will have to remain at low level and away from airports and housing.

Second, the Regulator reacts by pragmatism. The ban on commercial flight drones hasn't prevented investment in this area. So far, the regulator had instead chosen not to react to the open violations of the standards, from the moment that the safety of the people wasn't in danger. The idea of the new conception is to promote this new market by putting the rules protecting the physical safety of people.

Feb. 18, 2015

Sectorial Analysis

February 17, 2015, as the previous "Contrat de Régulation Économique" (Economie Regulatory Contract), the firm Aéroport de Paris (ADP)  has made available on its site to all "for consultation" the draft  "Contrat de Régulation Economique ("Economic Regulatory Contract)  for the period 2016 -2020.

Published in the wake of the meeting of the Board of ADP, the text is presented as a tool "for the Paris place", especially for air transport.

This shows that the document is primarily intended for investors and financial markets, the document being placed on the company website in the section for the "investors".

This illustrates the evolution from the traditional "contrats de plan" (plan contracts). But then, who are the parties to these types of contract?

Indeed, the very term "Regulatory contract"  is new in public Law. It appears as a sort of  modernization of "plan contract." The Conseil d'État (French State Council) finally admitted the contractual nature of these planning contracts. In these contracts, are parties were the State and the company in charge of a public service.

Because here the contract is an instrument of "economic regulation" the open public consultation draft rather expresses a global conception of  ADP, the company which manages the Paris airports,  for the future of the development of critical infrastructure that is the airport as the heart of global development of air transport.

The enterprise manager of the airport in the heart of the contract (rather than the State) in setting objectives for the coming four years is the letter and spirit of the French law of 20 April 2005 about Airports, which put the apparatus of this "Contrat de Régulation Economique" in place.

In this, the infrastructure manager is set by law as a "regulator of second degree", as can be a financial market enterprise. The company that manages and develops the Paris airports undoubtedly belongs to the category of " critical firms", as well it manages the future of the sector and helps to keep France a place in the world.

More, A.D.P. behaves like a Regulator, since it is carrying out the "public consultation", the consultation paper prepared by it,  being placed on its site and developing its ambitions for the sector and for France. But A.D.P. also expressed as a financial and economic actor, emphasizing the competitive environment,  demanding in passing more stability and clarity in the regulation in which it moves ...

That is why the consultation mechanism provided by the law must be more complex. Indeed, ADP can not be judge and jury. Therefore if the project raises observations, they must be formuled not to ADP but to the Ministries of Aviation and Economy, within a month. They shall communicate theiir content to ADP . Then the Commission consultative aéroportaire (French Airport Consultative Committee) will be consulted. At the end of this process, the "Contrat de Régulation Economique" will be signed.

Seing the end of the process, it remains in line with the plan contracts, since it remains the Economic Regulatory Contract is signed between the State and the essential infrastructure manager. But the consultation process shows firstly investors are the first recipients of the statements made by a privatized company presenting its draft primarily in terms of competitive context and international development and secondly the airlines that use daily services of the airports are also directly involved by theses questions of tarification.

Airlines protest against the increase in the money that will be asked. This will be imposed, since it is tarification and princing public policy. We are in unilateral rules. But it is indeed a "price" they feel to pay, they also heard a speech referring to competition in what the mechanism is presented as a "contract".

But then, does it take to admit that these "contracts for economic regulation" are not between two parties that are the state and the regulator of second degree that is the infrastructure manager but must be three, the State, the infrastructure manager and "stakeholders" that are mainly airlines?

This practical difficulty is much to the fact that the qualification of "contract" is difficult to justify in proceeding in which prevail unilateral mechanisms.

Updated: July 16, 2012 (Initial publication: July 4, 2012)

Breaking news

Airports are critical infrastructure. They often receive support from the State and the European Commission has adopted specific guidelines to soften the principle of prohibition of State aid in this area. Yet it is not necessary that the regulation be the mask of a violation of competitive equality. This is why the Commission has extended and prolonged on June 27, 2012, the investigation initiated in 2007 proposed to the airport of Alghero, Italy. Indeed, the investigation revealed including infrastructure subsidies, which the Commission doubt that they are comply with EU law.

Updated: July 2, 2012 (Initial publication: June 24, 2012)

Breaking news

Usually the companies in charge of a public service established with the State of the "plan contract". In application of the "Code de l'aviation civile (Civil Aviation Code), the private company "Aéroports De Paris - ADP" (Paris Airports) establishes a "contract of regulation". This one develops "contracts of economic regulation". They must generate visibility for the company and for the customers, set ceilings for the royalty, set quality objectives, respect the just remuneration of invested capital. The new "regulation agreement" concluded between the French State and "Aéroports De Paris - ADP" (Paris Airports) covers the 2011-2015 period, presented as a period of transition towards the profitability of capital. This contract was signed in July 2010. The contract was presented to investors June 27, 2012 in its implementation, "Aéroports De Paris - ADP (Paris Airports) progressing in its profitability.