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#DigitalSkeptic: Bezos Will Get Lost in Drone Twilight Zone

Stocks in this article: AMZN

And all that complexity pales in front of what will be a massive regulatory restructuring within aerospace industry.

"We have made great strides in accommodating unmanned aircraft system operations," wrote Michael P. Huerta, FAA administrator, in his 75-page report on the future of drones, released last month. "But challenges remain in the safe, long-term integration of the both public and civil unmanned airspace systems into the National Airspace System."

Paez and Diebner, in fact, liken the current regulatory and business environment for unmanned vehicles to the cellphone industry circa 1980, when the long, bitter road needed to establish the wireless communications business, such as bandwidth rationing, common standards and proper service levels, was the stuff of policy meetings and hype.

"This industry still needs pressure from the commercial sector to drive Congress to focus the regulatory debate on unmanned vehicles," Paez said. "An entire ecosystem must be put in place."

Amazon still loses money
What really puts Prime Air into the investor Twilight Zone, of course, is that it's not like we haven't heard this kind of costly hype before. Bezos and company are on track to bleed red ink for a second full year after sinking what little profits it ever made into local shipping points-of-presence meant to crush big box operators such as Wal-Mart.

Already a similar air of futility is swirling around Prime Air. Is anybody really arguing that in a world where the Parrot AR Drone offers unmanned flight to kids, Amazon Prime Air will have the monopoly on robots in retail delivery?

Product makers tired of the Amazon black box will be getting their own drones and cutting Amazon out Bezos entirely.

"There is no reason we can't have five-pound flying drones in the retail supply chain," Paez said.

What drones will cost, when they will deploy and who gets paid with them is still very much up in the air.

This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.
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