I think they do... the FAA's official stance is that the 400' limit is not a regulation, it is only a recommendation. The letter that started this thread appears to be from one person at the FAA that was on vacation when they discussed this. Though, IMHO the part of the letter there this person goes off on how all flights over 400' are automatically unsafe is really asinine. At best, the person was making up their own interpretation of the actual FAA stance, that you can fly over 400' but still need to abide by the regulation that it needs to ne a safe flight. Still, that is a simple thing and the person was _way_ off in their statement.
I think it's all been in plane English, it is just that the FAA has had a history of simply lying to people and not doing their job when it comes to drones being used in airspace. If they would simply stop misleading people and come out with some useful information, we'd all be in a better place.
