(Bloomberg) – At a recent apartment blaze in Oakland,California, a sheriff deputy directing firefighters with adrone-mounted video camera encountered a new hazard: a civilianquad copter that buzzed onto the scene.

"It's happened twice in the past few months," said AlamedaCounty Deputy Sheriff Richard Hassna, the department's chief pilotwho was using the device. "We're overhead at the scene of a firerelaying information to the command agency and a hobbyist fliesright below us and parks."

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Need for 'orderly skies'

Such intrusions — along with fears of drones being used by terrorists— have law enforcement urging that millions ofcivilian drones be outfitted with radio-tracking devices so theycan be identified. The idea is also backed by large commercialusers including Amazon.com Inc. and Alphabet Inc. that want orderlyskies in which to operate fleets of flying robots fordeliveries.

But it's riling fiercely independent hobbyists who don't want tobe monitored by the government or see their flight tracksposted on public websites.

"I don't want to be tracked everywhere," said Kenji Sugahara,who owns companies that fly drones for farmers and filmmakers andis also policy director for the Drone User GroupNetwork. "People are very worried about their personalprivacy."

Nevertheless, regulators are working on just such a requirement.The Federal AviationAdministration created an advisory panel in June of more than70 drone industry and user representatives — includingSugahara — in a fast-track attempt to develop requirementsso battery-powered aircraft can be identified in the sky. They haveto finish by Sept. 30 so the FAA can begincrafting regulations.

The pace is being driven by law enforcement agencies, whichwon't go along with the agency's plans to begin allowing moreextensive unmanned flights over people and in congested urban areasuntil they get assurances they can tell the difference betweenlegitimate operators and bad actors, FAA Administrator MichaelHuerta said in an interview.

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The group has already made "really, really good progress,"Huerta said. While declining to discuss specifics as it hashes outdetails, he said one of the areas the advisory committee is workingon is setting a demarcation line between smaller toys that don'tpose a threat and more capable craft that could carry a bomb or beused for surveillance.

Tiny devices can be installed in a drone to broadcast itsposition

Breakthroughs in technology makes the discussion possible.Cheap, tiny devices can be installed in a drone to broadcast itsposition. Radio transmissions that drones already use fornavigation can also be piggy backed.

California-based uAvionix Corp. has developed a radiotransmitter as small as a dime that would provide precise dronetracking data, according to its website. China-based SZ DJITechnology Co., the world's largest civilian drone manufacturer,earlier this year said it could adapt existing radio-controlsignals to identify and track its devices. The same data could alsobe transmitted on cellular networks.

Full requirements

While the full requirements haven't been hammered out yet, theidea is to give a police officer on the ground the identity of adrone's operator, in the same way a car's license plate can betraced to its owner. At the same time, it would give the drone'slocation, so police or even traditional aircraft could monitor itspath.

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The debate over drone tracking is critical to the growth of thecommercial side of the industry and has enormous financialimplications for some of the largest U.S. corporations, accordingto more than a dozen interviews with people familiar with thetalks.

The hopes of Alphabet X's Project Wing and Amazon Prime Air tocreate vast drone-delivery networks depend on a new low-altitudeair-traffic system to keep order among unmanned craft zipping overcities. Such a system, the outlines of which are being designed byNASA, requires that every unmanned aircraft within such anarea identify itself via a radio broadcast and follow therules.

"Amazon does not support anonymous operations" of drones in U.S.airways, with only minor exceptions such as hobbyists at designatedflying fields, Sean Cassidy, director of Safety and RegulatoryAffairs told a House subcommittee on April 4. Company spokeswomanKristen Kish declined to discuss current talks because it isparticipating in the FAA committee.

Telecommunications giants Verizon Communications Inc. andT-Mobile US Inc. are both on the FAA's advisory committee becauseeach stands to gain if the cellular networks are used. The panel'smembers include chip manufacturers Intel Corp. and Qualcomm Inc.Startups like AirMap Inc., which wants to sell data to drone users,are also involved.

Difficult to track

Under current U.S. rules, non-commercial drone users have widelatitude to fly, so long as they don't go over people or climb morethan 400 feet (122 meters) above the ground. Because it's sodifficult to track them, the agency has had only a handful ofenforcement cases in spite of more than 1,000 reports of potentialviolations such as flying near airport runways.  

The FAA's ability to monitor drone flights was dealt a blow onMay 19, when a U.S federal court invalidated the agency'sregistration system for unmanned aircraft. Both the House andSenate have pending legislation that would reinstate a droneregistry.

A requirement that drones be tracked would go significantlybeyond a registry — and it's opened a raft of questionsabout privacy, who should pay and whether a tracking system wouldbenefit users.

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"There will be all these tensions," said John Hansman, directorof the Massachusetts Instituteof Technology's International Center for Air Transportation whohas worked on drone issues. "There are some people who just don'twant any regulation at all."

Sugahara, of the Drone User Group Network, said most of thegroup's 25,000 members understand the concerns of law enforcementand would agree to some type of tracking — but withlimits. 

Drone operators' identities shouldn't be available beyond policeor other officials with a need to know, the tracking data shouldn'tbe uploaded into a national system and it shouldn't provide adrone's precise location, Sugahara wrote in a white paper earlierthis year. The locating beacon also should be inexpensive, as cheapas a $2 Bluetooth device, he wrote.

Precise GPS location

But under the Drone User Group Network's vision, drones wouldprovide far less data than what most traditional aircraftbroadcast, which increasingly includes a precise GPS location. Italso pits the drone group against some of the requirements Amazonand Alphabet have proposed.

Hassna, the Alameda County Sheriff's deputy, said he isn't surewhat the requirements should be, but there needs to be something toallow him to identify drones. He also worries about worst casescenarios: a hobbyist interfering with an air-ambulance helicopteror terrorists turning a drone into a weapon.

"Unfortunately, I've just begun to see these happening on aregular basis," he said. "I think it's going to get worse and causea problem."