(Bloomberg) — President Barack Obama's administration took thefirst step to opening the skies above the U.S. to widespreadcivilian drone flights while proposing strict limits on commercialoperations and privacy rules for those flown by governmentagencies.

The Federal Aviation Administration on Sunday unveiled aproposal to permit businesses to use small unmanned aircraft, solong as they are flown at low altitudes by a person who is at least17 years old, passes a knowledge test and gets an FAA certificate.Flights wouldn't be allowed out of sight of the operator or overcrowds, and couldn't exceed 100 miles (161 kilometers) an hour,according to a fact sheet issued by the agency.

"Technology is advancing at an unprecedented pace and thismilestone allows federal regulations and the use of our nationalairspace to evolve to safely accommodate innovation,"Transportation Secretary Anthony Foxx said in a release.

Pizza deliveries or flights to bring goods to people's homes,like those envisioned by Amazon Inc. Chief Executive Officer JeffBezos, won't be permitted. Google Inc. and Alibaba Group HoldingLtd. have also experimented with such technology.

Operators must stay out of airport flight paths and couldn'tdrop objects from a drone.

Even with those limits, the twin announcements by theTransportation Department's FAA and the White House were the mostsignificant attempt so far to set a framework for controlling a newtechnology that has at times evolved faster than the government wasable to react.

Allowing drones to be flown for business purposes in the U.S.may produce $100 million or more in economic benefits, according tothe FAA.

Privacy Concerns

President Barack Obama, in a separate policy directive alsoreleased Sunday, made his first attempt to address the concernsthat privacy advocates have raised about the increasing use ofdrones by government agencies.

The directive orders agencies to limit the collection andretention of data gathered by unmanned aircraft. Local and stateagencies receiving federal grants must also create drone privacypolicies, according to the memorandum.

While praising the effort as helpful, the American CivilLiberties Union said the directive fell short of the organization'sgoal.

The advocacy group for civil-liberties protections had calledfor a requirement for a warrant from a judge before drones could beused to monitor people. That isn't contained in the policy. Thegroup also said the White House should tighten limits on droneuses.

First Step

The standard leaves "the door open to inappropriate drone use byfederal agencies," Neema Singh Guliani, legislative counsel at thegroup's Washington office, said in an e-mail.

On the FAA's proposal, the Aerospace Industries Association, anArlington, Virginia-based trade group, said the draft regulationswere a good first step to promote drones, also known as unmannedaircraft systems or UAS.

"We believe this step will pave the way for additional serviceorganizations and industries to explore expanded operations and useof UAS technologies," it said in a release.

Lifesaving Drones

The FAA said the potential for drones to save lives justifiestheir use on an economic basis.

For example, using drones to inspect radio andtelecommunications towers would eliminate the need for workers toclimb the structures. Ninety-five workers died climbing thosetowers from 2004 through 2012, the FAA said.

Similarly, 17 manned aircraft performing aerial photographycrashed from 2005 through 2009, killing 19 people, according to theFAA. Drones could take over some of that work.

The proposed rule also said the FAA is considering creating moreflexible rules for "micro" drones lighter than 4.4 pounds, whichpose lower risks. The agency is asking for the public's reaction tothe idea.

There will be a 60-day public comment period on theregulations.