There are a few things that need some clarification. The first is the separation of privacy of and the actual device carrying the camera. The FAA most likely will not be tasked with dealing with the privacy issue. In fact, already many laws that are already in place about filming individuals no matter the method of doing it.
The second needed clarification is that the FAA currently does not have any regulations in place for these types of vehicles. The FAA released in 2007 a policy statement, though this policy statement has not gone through the necessary notice for proposed rule making that is required to create a regulation. This very detail has been the basis for two court cases that have found against the FAA.
This current issue is once again an attempt by the FAA to do an end around the process by issuing an interpretation to how they are going to apply the law that was passed in 2012 by congress and the wording about model aircraft. The unfortunate part about this new interpretation is that in effect it will be an attempt to create regulations as this new imterpretation will cover activities that previously the FAA exempted themselves from regulating. Some of the activities that would potentially be considered banned are RC shows where cash prizes are awarded.
The last issue that is in play is what makes a commercial operation. Carying passengers or cargo for pay (more than the actual cost required to opperate the aircraft such as fuel, landing fees, etc) is considered commercial. With regards to photography flights, one can find very inconsistent interpretations even with the FAA itself. The current interpretation is still very nebulous in that if the photography is incedental to the flight, then a non commercial pilot can conduct this flight. Despit this, there are various scenarios in which it can be required even if the pilot is not receiving compensation for the flight.
This lack of clarity for manned flight is now boiling over into the unmanned space. It gets further confused by the fact that this is technology that a small boy working a summer job for a few weeks can own one of these devices. More over, the lack of clarity seems to be centered around even for the manned flights that this is even a safety issue (photography from an aircraft). It seems more that the FAA was not as focused about the pay issue, but that a pilot may use this to skirt the commercial rules and start carrying passengers, yet not be compensated for carrying passengers, but for photography. This does not apply to an unmanned vehicle.
The worst part, though is that because the FAA has not yet issued legal regulations yet beyond interpretations, and email opinions, you have created confusion, and possibly a worse situation (more lives could be lost by not having search and rescue groups able to use this tech for one example). The FAA would be best to approach this in a stepped fashion and whin a few months release regulation on small craft. Then focus on the much larger craft.
I think this will lead towards finding some new areas in research on tracking these devices. But still I am wondering how government will be able to tackle this situation. As anyone from far approx distance 100 to 500 metres can control these devices so it is hard to figure out that who is the culprit?
Regulation of some sort is necessary, just to take care of the drone operators with no common sense. Case in point, I'm a firefighter and was recently working a 4000 acre fire utilizing many aircraft. A stupid drone operator was flying around this fire taking photos, almost shutting down the firefighting aircraft (until the drone operator was located and terminated).
That is the whole point of my rap...the idots will buy drones with cameras for few hundreds bucks and fly them any way they wish, collect pics, post them on Internet etc...that is largely legal here in Canada...what are you going to do if Canada starts sending hundreds of these drones across the border, will you be using anti-drone missiles?