Startup News Digest: 1/15/2016

Our weekly take on some of the biggest stories in startup and tech policy. 

Obama’s Final SOTU. President Obama addressed Congress Tuesday evening in his seventh and final State of the Union, which included a few nods to the tech industry and startups, too. He remarked on some upcoming proposals from the White House, including a push to bring computer science education to more schools. The president also spoke of the country's rich history of innovation, as well as the challenges workers face in the new technology-driven economy. "In this new economy, workers and start-ups and small businesses need more of a voice, not less. The rules should work for them."

Encryption Debate Continues. A new bill was introduced in the New York State Assembly this week that would essentially disable strong encryption on all smartphones sold in the state. If passed, it would be the first state law requiring a “backdoor” for encrypted technologies—something that is not only constitutionally questionable, but also not technically feasible without undermining the security of the system as a whole. The tech industry has been pushing back against these “backdoors” at all levels of government. Just last week at a counterterrorism discussion between high-level federal officials and tech leaders, Apple CEO Tim Cook called on the administration to issue a statement defending the use of unbreakable encryption. The White House has yet to take an official position on encryption.

New Regs and Report for Ride-Sharing in NYC. The New York City Council will soon introduce new legislation regulating for-hire vehicles, the Wall Street Journal reported last week. The proposed legislation would require for-hire vehicle services such as Uber and Lyft to make their cars more accessible to the disabled, among other regulations that may address surge pricing. These new laws could be introduced as soon as next week, following today’s release of the highly anticipated traffic congestion report from the Mayor's office. The study, which examines the impact of new ride-sharing services on the city’s traffic, was commissioned by New York City Mayor Bill de Blasio last summer after proposals to cap the number of for-hire vehicles were defeated. We’ve just started digging into it, but among other things, it claims “For-hire vehicles are a vital part” of the city’s transportation mix and does not blame any one company for local congestion. We’ll be watching whether the report’s findings will influence the city council’s new legislation.

Big News for Autonomous Vehicles. 2016 is shaping up to be the year of the autonomous vehicle. At last week’s Consumer Electronics Show, a number of automakers announced their forays into this rising market. Then, on Thursday the Obama Administration unveiled plans to include $4 billion for autonomous vehicle R&D in the proposed 2017 budget. The Administration also promised to issue regulatory guidance for companies around compliance with safety standards within six months. The federal government has remained relatively hands off in this new market, but the Administration’s announcement this week represents a new level of involvement and a huge win for proponents of this growing technology.

The Size of the Sharing Economy. The results are in. A recent and first-of-its-kind poll conducted this fall found 44 percent of American adults have participated in the sharing and on-demand economy—that's over 90 million people who've booked a room on Airbnb, hopped in an Uber, or ordered groceries from Instacart. The poll also found that 22 percent of American adults have offered goods or services through these new platforms in exchange for income. And despite a spate of recent lawsuits over worker classification, the vast majority of these workers describe their experiences as positive.

The State of Computer Science. Code.org, a national organization dedicated to expanding computer science education, published its 2015 report, revealing K-12 student enrollment in computer sciences courses is growing nationwide. Today, 25 percent of U.S. schools teach computer science and programming and several major school districts including New York and Chicago have made recent pledges to the subject in every school. Computer science is also the fastest-growing AP course of the past decade.

Americans Online. Last week, the Federal Communications Commission released updated numbers on broadband access in the U.S. While the percentage of Americans with access to advanced broadband has improved over the past year, there are still 34 million Americans (or about 10 percent of the country) who lack access to broadband at sufficient speeds. While this report suggests improvements in the broadband ecosystem, more needs to be done to connect the 34 million currently cut off from broadband opportunity.

Startup News Digest: 1/8/2016

Our weekly take on some of the biggest stories in startup and tech policy. 

Patent Lawsuits Up in 2015, Trolls in the Lead. Surprise, surprise! The latest numbers are out, proving that patent litigation is still out of control and patent trolling is indeed a real problem. Unified Patents’ latest breakdown of data indicates that 2015 saw the second highest number of patent cases ever (nearly 5,800 cases filed). Further, non-practicing entities (or NPEs, aka, trolls) filed two-thirds of them, largely in the Eastern District of Texas, a judicial district notorious for its friendliness to patent trolls. Additionally, 64 percent of patent litigation in 2015 occurred in the high-tech sector and NPEs were involved in over 88 percent of these high-tech cases, a 10 percent increase over 2014. Until the patent system is fixed, the trolling problem evidently isn’t going anywhere.

Net Neutrality Kerfuffle Over T-Mobile’s “BingeOn” Program: Recent reports about T-Mobile's treatment of streaming video services has many net neutrality advocates up in arms. Its latest offering, BingeOn, has actually avoided most of the criticism typically directed towards so-called "zero rating" programs. With BingeOn, T-Mobile allows any video provider to participate for free, thus skirting net neutrality rules that bar preferential data treatment for some paying companies. However, apparently, T-Mobile has been throttling (or, from T-Mobile's perspective "optimizing") all streaming video its users consume, not just streams from companies participating in BingeOn. Throttling lowers the data consumption associated with watching a video, but also diminishes video quality. Because the FCC's net neutrality rules essentially ban throttling, it's possible that the FCC could find T-Mobile in violation of its Open Internet Order. T-Mobile points out that users can opt out of BingeOn and the associated video throttling, but critics note that T-Mobile makes opting out excessively difficult. While FCC Chairman Tom Wheeler has praised similar offerings from T-Mobile in the past, BingeOn raises difficult questions about the application of the Open Internet Order that the FCC will need to resolve.

Drone Registration Challenged in Court. In December, the Federal Aviation Administration (FAA) announced new rules requiring the registration of recreational drones. According to data released by the FAA this week, over 181,000 drones have been registered since the registration site went live just three weeks ago. But not everyone is keen on registering their brand new toy. Some stakeholders have criticized the rules as being burdensome and unnecessary, while others have raised concerns around the public availability of registry data. And now a Maryland “model aircraft hobbyist” has sued the agency over the contentious rules, arguing that the registration requirement violates a federal law that prohibits the FAA from regulating recreational drones. The court has denied his request to immediately halt registration.

#CES2016. The annual Consumer Electronics Show takes over Las Vegas this week and along with the new electric cars and Ultra HD TVs, policymakers and government officials are also taking the stage. In fact, it was at last year's CES that FCC Chairman Tom Wheeler first indicated the agency's support for net neutrality. We don't expect any news of that nature, but this week FTC leadership told conference-goers the commission is close to striking a data-transfer deal for U.S. tech companies with its EU counterparts and FAA officials discussed new recreational drone requirements. USPTO Director Michelle Lee and Rep. Darrell Issa (R-CA) talked patent reform and Sen. Mark Warner (D-VA) made a showing, addressing policy challenges facing both government and emerging gig-economy startups as did . The new technologies unveiled at CES—virtual reality devices, autonomous cars, and other smart, connected tools—also offer a preview of new tech policy challenges to come.

The State of Female Founders. CrunchBase released their latest data on women-founded companies, illustrating that there is still a long way to go for gender parity among startup founders. Though 18 percent of companies that received seed funding in 2015 have at least one female founder, only 8 percent companies that received seed funding have at least one female founder CEO. For companies that received Series A and B funding in 2015, these numbers drop to 14 percent and 5 percent, respectively. The numbers may seem dismal, but this is a strong improvement from 2014, when only 10 percent of founders raising Series A rounds were women.

Startup Policy Digest: 12/18/2015

Our weekly take on some of the biggest stories in startup and tech policy. 

CISA Sneaks into Omnibus. As Congress scrambled to clear its legislative calendar before leaving DC for the year, it packed a bunch of unrelated bills together into a 2,000 page omnibus spending bill that will need to pass in order to adequately fund the government. This potpourri approach to legislation raises serious concerns about government transparency and access, as all but the most well-connected groups are effectively blocked from the closed-door dealmaking that resulted in the omnibus. This year’s omnibus produced one notably terrible outcome: the resurrection of the much-maligned Cyber Intelligence Sharing Act (CISA), which is meant to allow companies to share information on cyber attacks with government in order to help prevent future hacks. Critics argue that the bill creates more problems than it solves by jeopardizing user privacy, incentivizing companies to secretly monitor user activity, and allowing the government to obtain consumer data without a warrant. With the ECJ’s nullification of the EU/U.S. data transfer safe harbor so fresh in policymakers’ minds, it is a particularly inopportune time to pass a bill that many believe is effectively an expansion of government surveillance authority.

EU Sets New Data Privacy Rules. On Tuesday, the European Parliament and Council effectively agreed upon a negotiated version of the EU Data Protection Reform originally drafted in 2012. The measures will be formally adopted in early 2016 and go into effect in 2018. US businesses are concerned with several of the law’s provisions that make compliance challenging and also expensive. Among their concerns: Companies that violate the rules could face fines of up to 4 percent of global sales; the law also formalizes the “right to be forgotten” statute, allowing users to not only correct inaccurate personal data, but also the right to remove irrelevant or outdated information; the age of consent for data processing is set at 16 years; companies must alert authorities within three days of a reported data breach; and larger “data-processing” companies must designate a data protection officer.

An Uber Union? Seattle has become the first city in the nation to allow on-demand drivers for companies like Uber and Lyft to unionize. The legislation, passed by Seattle’s city council on Monday, is seen as a test case for the changing 21st century workforce and will likely be contested in court. While some have argued that the new policy conflicts with federal law and raises antitrust concerns, others insist that the local law has teeth. Regardless of its merits, the law further complicates the broader debate around worker classification in the emerging “gig economy” and whether policies can support both innovation and workers.

California’s New Self-Driving Car Laws. A month after a study by California’s Department of Motor Vehicles, the state released proposed rules for driverless cars. Some of the rules came as no surprise to driverless car manufacturers such as Google, Tesla, and Ford: consumers must receive special training certificates and the autonomous vehicles must meet certain cybersecurity standards. However, one proposal, if passed, could significantly impede innovations in this emerging industry. The California DMV wants a licensed driver present in the vehicle, preventing the kinds of functions—package-delivering vehicles or transportation for the blind—that could truly revolutionize transit. This rule also complicates the liability question by making the licensed driver legally on the hook for any accidents. Google, on the other hand, has thus far stated that it is willing to take responsibility for any accidents on the road. There’s still room for debate though; these rules open for public comment next month.

BingeOn? Maybe Not Says FCC. In its net neutrality rules from earlier this year, the FCC declined to enact a flat ban on “zero rating” programs whereby ISPs exempt certain data from user data caps. Instead the FCC decided to tackle such issues on a case-by-case basis. Since then, ISPs have begun to test the FCC’s willingness to regulate data exemption policies, such as T-Mobile’s Music Freedom and BingeOn plans. While T-Mobile’s programs do not implicate the most concerning net neutrality problems by allowing any music or video streaming company to take advantage of the data exemption without payment, some net neutrality advocates have taken aim at T-Mobile’s policy of throttling all video traffic regardless of whether it is a part of the BingeOn program. FCC Chairman Tom Wheeler has previously applauded T-Mobile’s programs as creative, pro-consumer innovations, but now, the FCC wants to take a closer look. With the Commission’s data cap inquiry and the DC Circuit’s pending decision on the validity of the FCC’s net neutrality, 2016 looks to be an important year for the future of the open Internet.

Drone Registration Goes Live. The Federal Aviation Administration unveiled new recreational drone requirements this week. Starting December 21, drone hobbyists must register their unmanned aircrafts and pay a $5 fee through a new FAA web page. The registration requirements represent a mostly uncontroversial attempt to maintain safety and accountability in national airspace as more and more drones populate the skies.

GOP Misses on Tech Issues. While many observers called this week’s Republican debate the most “substantive” yet, tech experts heard uninformed positions and misconstrued information on issues such as surveillance, the operation of the Internet, and encryption. For instance, Gov. Kasich inaccurately assumed that encryption prevented law enforcement from collecting information that could have foiled the San Bernardino shootings. Yet, whether encryption played any role in law enforcement’s access to important digital communications has not been confirmed. Meanwhile, Mr. Trump suggested that parts of the Internet should be “closed,” a preposterous suggestion that would not only hinder communication amongst bad guys, but also the good guys who drive ambulances, operate hospitals, and alert the world to vital information. Such superficial positions on high-impact tech policy are disconcerting - legislating these areas will require thoughtful (and, frankly, more complicated) solutions.

Prisoners Turned Coders. San Quentin State Prison just graduated 21 inmates from its tech incubator, which teaches inmates to code as well as the skills it takes to design and pitch a business to investors and peers. The program,  made possible by The Last Mile organization, has become so popular that inmates are requesting transfers to San Quentin. Next up: A new program from The Last Mile will provide inmates with paid coding jobs for businesses outside prison walls.

Improving Access to STEM with Policy

Back in January, we worked with Senators Shelley Moore Capito, Tim Scott, Amy Klobuchar, and Representatives Barbara Comstock, Tulsi Gabbard, Ruben Gallego, Robin Kelly, Cathy McMorris Rodgers to launch the Diversifying Tech Caucus (DTC). The Caucus was organized to address one of the most pressing issues facing the tech sector today: the alarming lack of diversity in the tech workforce. DTC members have been instrumental in promoting a variety of bipartisan bills that would not only strengthen the tech talent pipeline by providing Americans with better access to STEM (science, technology, engineering, and math) education opportunities, but would make it easier for new entrepreneurs and workers to participate in the startup ecosystem.

Here are a few pieces of legislation introduced and sponsored by DTC members (and others) that have our support:

• Diversity in Science Technology and Nurturing Capable Educators Act (DISTANCE) Act
  Sponsored by DTC Chair Rep. Robin Kelly (D-IL), this bill would provide scholarships to college students studying in a STEM field who agree to teach in a K-12 school for five years after they graduate. The Department of Education’s most recent teacher shortage report highlights the consistent shortage of math and science teachers, which affects 28,000 students a year in California alone. The DISTANCE Act would incentivize STEM college students to become teachers, improving America’s ability to train the next generation of tech innovators.
• Innovate America Act
  Sponsored by DTC Chair Sen. Amy Klobuchar (D-MN), the Innovate America Act would, among other things, create 100 new STEM-focused secondary schools, measure graduation rates for students majoring in STEM degrees, increase the number of scholarships for aspiring computer science teachers, and expand undergraduate research opportunities to encourage more students to enter STEM fields. Since computer science is often not designated as a core academic subject, administrators are less likely to hire teachers who are prepared to teach it. Bills like the Innovate America Act help increase the pool of skilled computer science teachers who are crucial to building the STEM pipeline.
• GI Bill STEM Extension Act
  Introduced by Rep. David McKinley (R-WV), this bill would authorize nine months of additional Post-9/11 Educational Assistance for a veteran who has used all his or her benefits and who: (1) is enrolled in a postsecondary education program that requires more than the standard number of credit hours for completion in a STEM field; or (2) has earned a postsecondary degree in one of those fields and is enrolled in a teaching certification program. Given that a typical undergraduate engineering program takes around 4.5 years to complete, this bill provides important financial relief for veterans transitioning into STEM jobs.
• America Can Code Act
  Introduced by DTC members Reps. Farenthold and Cardenas, the bill would designate “computer programming languages” as “critical foreign languages,” which would provide incentives for state and local schools to teach more computer science classes in K-12 curricula. Creating incentives for schools to boost computer science curricula might seem peculiar, considering the well-known need to train a ever-growing need for skilled programmers, but currently, only one in four schools teaches coding. The bill also establishes a Task Force on Computer Programming and Coding (in the Department of Education) to identify and prioritize challenges of educating and training a workforce equipped to fill jobs in emerging STEM fields.
• Veterans Entrepreneurial Transition Act (VET Act)
  Introduced by Sens. Moran and Tester (and co-sponsored by DTC chair Sen. Shelley Moore Capito), this bill would establish a pilot program enabling veterans to use their GI Bill benefits towards starting a new business or purchasing an existing business. We described the context (and our support) for this bill here. The VET Act would make it easier for veterans to participate in the tech startup economy and achieve entrepreneurial goals that don’t require higher education.

Congressional interest in working on legislation that addresses the tech world’s diversity problem remains high, but adding your voice to the conversation about these bills will go a long way towards moving the agenda forward. Bill sponsors are always looking for emails, calls, and letters from the public in support of the provisions in the bill; personal anecdotes are particularly impactful in order to highlight the importance of a bill’s goals. You can find contact information for members of Congress on their respective websites (also linked to their names in this post).

Are you a startup that cares a lot about improving the tech talent pipeline? Do you want to work with Engine to support legislative solutions? Send us an email at ange@engine.is.

Startup News Digest: 12/11/2015

Our weekly take on some of the biggest stories in startup and tech policy. 

Net Neutrality Has its Day in Court. The net neutrality debate that has dominated tech policy headlines for the past two years finally got its day in court last Friday. A panel of three judges from the DC Circuit heard oral arguments in the lawsuit brought by a consortium of ISPs to invalidate the FCC’s net neutrality rules. Proponents of the FCC’s rules came away from the hearing fairly optimistic. A majority of judges seemed to side with the FCC in the most crucial aspect of the dispute: whether or not the Commission had adequate authority to reclassify Internet access as a “telecommunications service.” The court pushed back more significantly on the FCC’s authority to reclassify mobile broadband and the adequacy of the notice the FCC provided about the final rules it adopted. While we remain optimistic about the Court’s ultimate decision, the net neutrality debate will almost certainly not go away when the Court issues its ruling early next year. It seems likely that the case will ultimately end up before the Supreme Court, and Congress continues to ponder whether it should pass anti-net neutrality legislation.

Feinstein Wants Tech to Report Terrorist Activity. As terrorists attempt to use Internet platforms to mobilize followers, disseminate propaganda, and coordinate attacks, working to diminish militants’ capacity to organize through social media is critical. But the Requiring Reporting of Online Terrorist Activity Act, introduced by Senator Dianne Feinstein (D-CA) earlier this week, is not the answer. The bill would require tech companies to report “any terrorist activity” that they have knowledge of to law enforcement. This obligation seems innocuous on its face, but as often happens, difficulties arise in determining how to actually apply this standard. Emma elaborates on all of the reasons the bill’s controversial (and previously rejected) framework could potentially do more harm than good here.

Computer Science in Classrooms. An education bill signed into law on Thursday acknowledges computer science as a foundational academic subject. By doing so, the bill puts computer science “on equal footing with other subjects when state and local policymakers decide how to dole out federal funds.” This new designation could potentially accelerate computer science's introduction into classrooms across the U.S. and ultimately help address the country's growing tech talent shortage.

Bill Would Cut Back H-1Bs. Senators Bill Nelson (D-FL) and Jeff Sessions (R-AL) introduced a bill this week that would reduce the number of H-1B visas available by 15,000 and also modify the way those visas are allocated—requiring they go to workers who will earn the highest wages. The H-1B program allows companies to hire foreign high-skilled employees, including those with expertise in science, engineering, and computer programming. While these visas are highly coveted within the tech industry, accounts of program abuse have galvanized members of Congress to restructure the program. “This bill directly targets outsourcing companies that rely on lower-wage foreign workers to replace equally-qualified U.S. workers,” Sen. Nelson said in a statement. While attempting to prevent bad practices by specific outsourcing companies, this bill would unduly harm the wider tech industry by further limiting global talent from contributing to U.S. companies, big and small. 2015 saw a record number of H-1B applications: 233,000 for the current 85,000 spots.

Investment Crowdfunding for Tech? Not So Fast. An article in this week’s Wall Street Journal highlighted a few of the shortcomings of investment crowdfunding, a new fundraising tool for startups made legal last month with the release of SEC rules. Those rules contain numerous burdensome requirements for companies raising equity from the crowd, potentially deterring high-growth technology startups. For instance, once a company takes on over 500 investors or grows to a certain size, it must file regular disclosures with the SEC: “It is all the pain of an IPO without the benefits of the IPO.” We’ve previously detailed some of the other issues with those rules, concluding that policymakers must continue to work to lower the cost of raising seed capital through crowdfunding or the impact of investment crowdfunding for startups will be modest.

What We Heard in Iowa: Earlier this week, Engine teamed up with the Technology Association of Iowa to discuss technology policy with Iowa entrepreneurs, caucus goers and two of the 2016 presidential candidates in Cedar Rapids. As the Cedar Rapids Gazette reported, the candidates agreed that education is “vital to innovation” but, not surprisingly, disagreed on the federal government’s role. O’Malley’s address focused on his track record as governor of Maryland. While Fiorina took a different approach, focusing on national security and technology “as a tool and a weapon” in those efforts. The forum offered a glimpse on where at least two candidates stand on a handful of important tech issues and as we look to 2016, we hope to hear a lot more.

Patent Suits Cost Universities. Universities have been getting more involved in patent reform policy and a recent Brookings article explains why. Its author also emphasizes that universities are turning observers off by engaging in offensive litigious actions, which is seen as contrary to the public mission of a university. Furthermore, it doesn’t make sense for universities to be involved in patent reform conversations since universities as a group do not have a financial interest in patenting: 87 percent of tech transfer offices operate in the red. Since there is a false belief among some that without patents there would be no innovation, it is important that the public voice of universities acknowledge “that the debate on the impact of patents on innovation is not settled and that this impact cannot be observed in the aggregate, but must be considered in the context of each specific economic sector, industry, or even market.”

Where are the Women in Tech? A new list was published on the “Best Cities for Women in Tech” and Washington, DC topped it, with women making up about 37 percent of the tech workforce (New York, NY comes in at number five and San Francisco, CA at 23). Kansas City, Missouri (at number two) was one of the only two cities in the study where women in tech don’t face a gender pay gap. Recruitment of women and underrepresented groups in the tech community remains a large part of the diversity conversation: language used in outreach and job descriptions could be turning well-qualified applicants off from even applying. One startup, Textio, is trying to address this problem with their product that “applies a form of artificial intelligence (AI) called natural language processing (NLP) to study the verbiage in documents” and can help highlight words with certain negative connotations.

Startup News Digest: 12/4/2015

Our weekly take on some of the biggest stories in startup and tech policy.

Trade Secrets Bill Resurfaces. On Wednesday, the Senate Judiciary Committee held a hearing on the Defend Trade Secrets Act (DTSA), a bill purportedly meant to help curb international trade secret theft by creating a federal cause of action for trade secret appropriation. However, like most intellectual property laws, trade secret litigation is rife with abuse as companies regularly use trade secret claims to stifle competitors and hinder employee movement. The proposed legislation would exacerbate these problems by creating an ex parte seizure procedure whereby a party can—without detailed factual inquiry and without a presentation of both sides of the case—ask a judge to seize a defendant’s property. In this regard, the DTSA goes well beyond what state trade secret law provides, making it a potent tool for incumbents to use the courts to unfairly hinder legitimate competition. And, international trade secret thieves will be able to avoid this federal law as they have avoided prior state laws by simply being outside of the US, it’s hard to see how this bill would actually address the problem it claims to address.

Net Neutrality Hearing. The DC Circuit Court of Appeals heard oral arguments today in the challenge to the FCC’s net neutrality rules. A group of telecom companies filed suit against the FCC shortly after the Commission issued its net neutrality rules this spring, arguing that the decision to reclassify violated administrative rules and exceeded the FCC’s delegated authority. While most net neutrality supporters believe that the Commission’s rulemaking is likely to withstand legal challenge, the DC Circuit is notoriously unpredictable. The hearing itself was not broadcast due to the DC Circuit’s strict rules on recording proceedings, so we’ll have to wait for reports from those in the room to get a read on how the judges received each side’s arguments. We’ll be tracking closely.

Starting Up the Broadband Economy. In an op-ed in re/code, Engine Policy Director Evan Engstrom elaborates on why policies that encourage a competitive broadband market are essential to the continued success of the startup economy. Increasing competition ensures America’s entrepreneurs can use their limited funds to build their businesses, rather than lining the pockets of a few huge incumbent providers. There is still a long way to go towards a robust, healthy Internet ecosystem. But we are working to ensure that startup voices are heard and that real reform happens now.

Trouble for ECPA Reform? The broadly supported Email Privacy Act ran into opposition from law enforcement authorities at a House Judiciary Committee hearing on Tuesday. Calls for an emergency exception and a carve out for civil agencies are nothing new, but they are preventing the committee’s chairman, Rep. Bob Goodlatte, from backing the legislation. Despite being one of the most popular bills in Congress with over 300 bipartisan cosponsors, it won’t move until Rep. Goodlatte gives the go-ahead. We’re tracking.

Add “Lobbying” to List of Startup CEO Responsibilities. Engaging with lawmakers is just another part of being a startup leader now, reports the New York Times. “In addition to knowing the language of computer code, founders are speaking the language of Washington, keenly aware of the potential regulatory battles that could be on the horizon.” In a shift from the historical status quo, startups are no longer eschewing politics, but increasingly embracing a dialogue with D.C. instead.

Patent Lawsuits Filed Set New Record. On November 30, 257 new patent litigation cases were filed—a new one day record. Furthermore, 196 of these cases were filed in the Eastern District of Texas, a notoriously plaintiff (and troll) friendly court. This is clear proof of forum shopping and further evidence that patent reform legislation should also address venue abuse. The mass amount of filings are likely tied to the fact that December 1 marks the effective date of significant changes in the Federal Rules of Civil Procedure for patent cases—i.e. going forward, plaintiffs may be required to provide more information in their initial claims.

Women in STEM. Michelle Lee, the Director of the US Patent Office, authored an op ed in which she cites a study that found that only 15% of all inventors are women. She writes, “The lack of gender parity is not just a social issue, it is an economic imperative.” In response, the Patent Office has launched, in partnership with Invent Now, an “All in STEM” initiative to get more girls interested in STEM and more women in flourishing STEM careers. Meanwhile, the latest diversity numbers from tech companies demonstrate the continuing need: women employed globally by Microsoft decreased from 29% to 26.8%.

Cities and Innovation Ecosystems. It takes years for cities to build up a “critical mass” of tech companies and workers to the likes of the Bay Area. But in some of the nation’s smaller cities, the environment has proven conducive to small companies and large companies cooperating in a way that has become engrained in the DNA of Silicon Valley—where startups are built off the API of large companies and interoperability is part of the culture. A recent report by the World Bank discusses what factors affect the growth of entrepreneurship ecosystems across different cities.

Conversations Around Capital Access. Before taking a break for Thanksgiving, Engine attended a forum hosted by the SEC on capital access issues for startups. Participants honed in on the JOBS Act rules: how they’re playing out in practice and whether there are policy modifications that could facilitate their success. Read Emma’s run-down of the discussions here.

Startup News Digest: 11/20/2015

Our weekly take on some of the biggest stories in startup and tech policy. 

Encryption Debates Resurface. Last week’s terrorists attacks in Paris reignited debates over encryption. Officials suspect the attackers may have used encrypted messaging systems to coordinate the plots, (though nothing has been confirmed.) Policymakers are again considering whether the law should require tech companies create “backdoors” for law enforcement, making it easier for officials to track and disrupt threats. Many in the tech community, including Apple, have publicly opposed such backdoors for government, arguing these restricted access points could make their systems more vulnerable.  

$100 Million in Grants for Tech Training. This week, White House representatives were in Baltimore to announce the expansion of its TechHire initiative with the launch of a $100 million grant competition. TechHire, which launched in March, involves education and employer partnerships in dozens of regions across the U.S., all dedicated to training, recruiting, and placing more Americans in tech jobs. Awards from this new grant will go to programs across the country that serve Americans who face barriers to entering the tech sector, whether those are educational, geographical or income-based.

Startup Equity in Highway Bill. A little known piece of startup-friendly legislation has made its way onto the highway bill, the massive federal transportation bill that lawmakers in the House and Senate are scrambling to finalize. This unrelated legislation is the RAISE Act, which would more easily allow startup employees to sell company equity to accredited investors. In October, the House passed the bill unanimously, but it hasn’t yet made its way to the Senate floor. We won’t know until December whether these new rules will remain in the highway bill - federal funding for roads has been extended to December 4 while Congress hashes out the details of the new bill.

Chicago Limits Drones. Chicago’s city council passed a bill banning certain uses of drones. The first bill of its kind, the rules will potentially hinder hobbyist use. Chicago’s ordinance, in line with FAA regulations, prohibits drones from flying above 400 feet, flying within five miles of and flying over schools, churches, hospitals, police stations, and any private property without consent. Chicago has experienced some uncomfortably close encounters with drones: one crashed Midway airport’s runway and another flew frightening close to crowds gathered at Lollapalooza.

Patent Reform will Encourage Innovation. Executive Director Julie Samuels was featured in a series of perspectives on patent reform in the Washington Post. Her perspective: if Congress does not pass patent reform legislation, patents will inhibit the innovation they set out to incentivize. Innovative inventors and young companies are being threatened by “patent trolls” that are wielding bad patents, frivolous infringement allegations, and exploiting loopholes in an expensive patent litigation system. Unfortunately, legislation that would help relieve startups and stop trolls is stalled in Congress - largely because of incumbent interests, e.g. the pharmaceutical industry (PhRMA). The bottom line: the one-size-fits-all patent system that has long worked for PhRMA is not working for software.

ICYMI: November is National Entrepreneurship Month. In other news from the White House, President Obama has issued an official presidential proclamation designating the month of November as National Entrepreneurship Month. “Since our Nation's founding, our progress has been fueled by an inherent sense of purpose and ingenuity in our people. Americans have more opportunities now than ever before to carry forward this legacy - to create something, to raise capital in creative ways, and to pursue aspirations,” states the proclamation. While we’re always celebrating the work of entrepreneurs, it’s great to see policymakers and organizations across the country rally behind them this month.

White House Expands Efforts to Get More Americans Working in Tech

Today, there are around 5.5 million unfilled jobs in the United States. According to the White House, over half of these openings are in technology fields including software development, network administration, and cybersecurity. These are just the current numbers. By 2022, the Bureau of Labor Statistics estimates computer-related occupations will yield more than 1.3 million job openings - openings at major technology companies and yet-to-be-founded startups. Meanwhile, millions of Americans, notably young Americans, are out of work or under-employed. This significant gap inspired the White House’s TechHire initiative, which launched last March. The effort involves education and employer partnerships in dozens of regions across the U.S., all dedicated to training, recruiting, and placing more Americans in tech jobs.

This week, the administration announced it’s expanding the program with a $100 million grant competition for programs focused on supporting more Americans in accessing these high-demand, well-paying jobs with $50 million set aside for 17 to 29-year-olds. The Department of Labor has released the application for these grants and says awards will be made next year. It’s specifically looking for innovative programs that serve Americans who face barriers to entering the tech sector, whether those are educational, geographical or income-based.

The need for these programs is real. As we’ve highlighted and discussed at length, today’s tech sector is far too homogeneous in both its makeup of both employees as well as founders. This is bad for the industry: We know more diverse teams perform better. It’s bad for users: Technology’s tools are used by everyone, so should be developed by a greater diversity of thinkers with different experiences and backgrounds. And as the numbers show, it’s bad for our economy: We simply need more Americans filling these jobs.

Coding bootcamps are among the innovative educational programs this new grant could support. Bootcamps teach students job-ready web development languages at an accelerated pace, usually within a few months. Curriculums are often designed for and highly adaptable to market demand, allowing some bootcamps to boast job placement rates of over 90 percent. Yet, a majority of the students enrolling in coding bootcamps pay out of pocket - many programs are mpt accredited and therefore, ineligible for federal student aid. These students are also predominantly white men with bachelor’s degrees. Grant funding could expand access to these programs for more potential tech workers.

Representatives from the White House discussed the new grant at an event in Baltimore earlier this week, one of the 35 cities, states, and rural areas that have established TechHire-supported programs. Our trip to Baltimore last month showcased the city’s commitment to bringing more residents into its emerging tech workforce. National companies like Under Armour, and newer startups like ZeroFox, are leading the city’s startup ecosystem there. With concerted efforts to train more local talent, these companies could soon have new hiring pools to tap into. As one Baltimore investor told the audience, tech talent is more important to growing local companies than capital.

In NYC with VetTechTrek, Supporting #VetsWhoTech

On Friday, we were honored to join the organization,  VetTechTrek (VTT), on their New York City trek into the offices of ten tech companies.VetTechTrek’s mission is “to build a known path between the military and tech...by breaking the mold of traditional recruiting practices.” Over the course of two days, they brought over twenty veterans, and current servicemembers nearing their military exits, into tech companies, incubators, and coworking spaces to connect them directly with current employees and see first-hand the atmosphere and opportunitiesin the industry. Not only does the experience support veterans by expanding their networks with host companies, but the VTT program supports community building among veteran participants.

At each company stop, the VTT entourage is introduced to a panel of employees with relevant roles, recruiters, and veteran employees. Panelists provided a range of insights for VTT participants, including:

• At a high level, how to translate veteran resumes, what the company is looking for in their employees, and how veterans’ military skills fit into roles at a specific company.
• What veterans should look for in the company they work for, depending on their interests, personal goals, and values.
• How veterans should best position themselves for the jobs they want and the importance of building a network.
• How military experience is an asset—an asset that brings critical skills to the company workforce and diversity that improves the product.

The group visited more than ten tech companies including, Uber, Venmo, and Warby Parker. Seeing very different spaces and business models back-to-back allowed participants to understand the breadth of companies in the tech sector and the importance of finding a company that aligns with their own needs and values. However, what was consistent across the companies visited was the overall feeling that company employees are dedicated to their products and care about making an impact, a feeling very familiar for former and current servicemembers.

It was an empowering afternoon seeing an organization directly strengthening the #VetsWhoTech pipeline. For more information on the trek, read VTT’s recap.

Startup News Digest: 11/13/2015

Our weekly take on some of the biggest stories in startup and tech policy.

#VetsWhoTech on Veterans Week: The passage of Veteran’s Day offered a moment for the tech community recognize the enormous contributions of our service men and women, the lessons we can learn from them, and the plain fact that veterans are very much a part of the tech and startup workforce. We’ve highlighted some of their stories and unique career paths in a booklet that profiles seven successful veterans in the technology industry. Yet, as these stories underscore, the current offerings covered by veterans benefits are woefully outdated. In an oped, Engine Executive Director Julie Samuels called on Congress to fix the challenges facing veterans looking to transition into the tech industry: "Trained as leaders and decision makers in complex situations, many veterans have the fundamentals to quickly learn or adapt problem-solving skills as an entrepreneur launching a startup or an engineer at a tech company.” It’s time policymakers address the limitations of veterans benefits in a changing economy.

Congress' Copyright Listening Tour. Since the spring of 2013, when the Register of Copyrights called for Congress to write “Next Great Copyright Act,” the House Judiciary Committee has held more than 20 fact-finding events to solicit opinions from a variety of stakeholders about what reforms they should pursue. This lengthy “listening tour” took a swing through California this week with stops in Silicon Valley and Los Angeles. The Northern California roundtable featured participants from all segments of the tech sector, from startups and larger tech companies to investors, academics, and advocacy organizations. The conversation was refreshingly in-depth throughout, including a series of exchanges between the Representatives and panelists about the need for fixes to copyright’s statutory damages regime. While participants were generally supportive of the DMCA, they also highlighted the need to address the growing problem of false takedown notices, which disproportionately hurt small companies.

Court Rules ITC Can’t Block Overseas Data Flow. The US Court of Appeals ruled in ClearCorrect v. ITC this week that the International Trade Commission (ITC) does not have the authority to block the electronic transmission of digital data from overseas. The ITC has typically had authority to block the importation of solely material, patent-infringing devices - and the Court confirmed this. This is an important decision because, as Charles Duan of Public Knowledge states, it “helps to ensure that Internet users have unfettered access to the free flow of information that has proved so useful for innovation and free expression.” The entertainment industry, however, is disappointed in the ruling which they hoped would have authorized the ITC prevent the import of pirated movies, books, and other digital goods.

Gig Economy Politics Makes Strange Bedfellows.  Tuesday saw the emergence of an unlikely alliance between gig economy giants and labor groups. In a letter addressed to regulators, the coalition of 37 startups, VCs, labor advocates, and thought leaders called for “a stable and flexible safety net for all types of work […] regardless of employment classification.” The letter presented more of a framework than clear, concrete solutions to the current worker classification conundrum. But the group did highlight the need for easier and more expansive access to the sorts of benefits that are traditionally enjoyed by full-time employees. Notably absent from the letter was Uber, which is embroiled in its own legal battles around this issue.

Clay Shirky on Online Education. In a compelling essay on Medium, Clay Shirky writes that the digital revolution in higher education isn't the future, it is already happening. Millions of undergraduates enroll in online courses every semester and have now for several years. Shirky points out this shift towards online learning is less a pedagogical change than an organizational one that is serving a far wider population of college students than the public conversation about higher-ed tends to focus on. Online education offerings are not only more affordable than traditional college courses, they also meet "a demand for more flexibility by students who have to manage the increasingly complicated triangle of work, family, and school."

Immigration Arguments Making Headlines. A handful of immigration issues made headlines this week. A federal appeals court ruled against the Obama administration's Deferred Action for Parents of Americans (DAPA) plans and Republican presidential candidates sparred over one another's positions on amnesty. Nonetheless, few candidates are discussing proposals to reform or expand the nation's high-skilled immigration system, where problems also persist. This week, The New York Times reported on the particular challenges small companies face in the competition for limited H-1B visas. Large outsourcing companies have flooded the system with requests in recent years and in 2014, just 20 employers acquired 40 percent of the available visas. In other vias news, the Department of Homeland Security is considering amending its Operational Practical Training program to extend the length of time foreign students in STEM fields can remain in the U.S. The agency is accepting comments on this proposed change until Nov. 18.

More Spectrum, Please. Did you know that by the end of this decade, over 50 billion “things” will connect wirelessly - from your thermostat to your car to your fitness tracker? Or that in the same time period, mobile data traffic is projected to increase seven-fold? What about the fact that the federal government controls the vast majority of spectrum, the invisible airwaves that enable these wireless products and services? In the second post in our Broadband Solutions Series, we take a look at why making more government spectrum available for commercial use is essential to improving competition and unleashing the next wave of mobile innovation.  

Expanding Opportunities for Foreign STEM Grads

Today, over one million students from foreign countries are pursuing their educations in the United States. And according to the Department of Homeland Security (DHS), about 38 percent of these students are studying in STEM fields, earning degrees in one of the fastest-growing sectors in the American economy. Despite the demand for STEM-educated workers, many of these students have limited options if they want to remain in the United States after graduation. One of these options, the Optional Practical Training (OPT) program, extends the F-1 student visa for a short period to offer graduates a runway to gain additional on-the-job skills, and hopefully, secure a longer-term visa sponsored by an employer. Last month, DHS announced it was reviewing this program and proposed to extend this 12 month runway by 24 months, specifically for STEM graduates.

Engine supports the proposed OPT extension for STEM-educated graduates. It may seem like a nominal change, but this extra time could radically change the career prospects for many of the world’s most talented young workers. For careers in information technology and software engineering, this kind of on-the-job, applied training is an important aspect of a post-graduate education. Further, by granting F-1 visa holders slightly more time in the U.S., these graduates may also have a better shot at finding an employer willing to sponsor a visa for more permanent work authorization.

Foreign students compete fiercely for admission into American universities, where they’re exposed to some of the world’s best technical and entrepreneurial training. Yet more often than not, it’s illegal for them to remain in the U.S. and dedicate their talents to American companies or even launch their own new ventures here. It makes no sense for the U.S. to continue training the world’s brightest and best, only to send them back home or to other countries with more welcoming immigration policies. While there remains a desperate need for large scale reform to allow foreign students to remain in the U.S. full time to contribute their much needed abilities to growing the U.S. tech economy, the OPT extension is an important step towards helping the U.S. retain talented individuals.

Share your support for the proposal with DHS on or before November 18, 2015 by submitting comments here.

Commemorating Veterans Day and #VetsWhoTech

Here at Engine, we are commemorating Veterans Day by driving and supporting conversation about #VetsWhoTech.

• We launched a booklet that follows the paths of seven successful veterans in the technology industry and calls on Congress to update services provided to veterans to reflect the changes in a 21st century economy.
• We shared many of these stories as part of our “Innovation for All” series on  Medium.
• We hosted a briefing for members of Congress and their staff on Capitol Hill about “Veterans Diversifying Tech”. The event included a panel moderated by Engine’s Executive Director Julie Samuels and featured Todd Bowers (Director UberMILITARY, Uber), Nicole Isaac (Head of Economic Graph Policy Partnerships, LinkedIn), Steve Weiner (Co-­Founder, VetTechTrek), Andrew Kemendo (Founder & CEO, Pair Inc.), and Rob Polston (Recruiter, Amazon Web Services).
• Yesterday, we celebrated #VetsWhoTech in San Francisco with a launch event for our booklet, featuring many of the veterans profiled. (Recap to come!)
• Later this week, we’ll join our friends at VetTechTrek for their visits with over 20 veterans to various tech companies, exposing and connecting them to jobs in engineering, sales, and beyond. (For a recap of their previous treks, visit their Medium page.)

But this is just the beginning. We’re calling on Washington to support policy that would better prepare our nation’s veterans for careers in the tech industry, with relevant training and resources before and after exiting the military.

Our military is made up of diverse, driven individuals with a range of skills and experiences—and a diverse entrepreneur and employee population is key to ensuring the tech economy fosters prosperity, creates jobs, and improves our lives. We look forward to working with members of Congress on policy efforts aimed at strengthening the veteran tech talent pipeline.

Startup News Digest: 11/6/2015

Our weekly take on some of the biggest stories in startup and tech policy.

More Eyes on EU Data Laws. Congress examined international data issues at two separate hearings this week, covering everything from cross-border data flows to U.S. surveillance reform. But the main focus was the recent EU safe harbor decision. Negotiators have until the end of January 2016 to find a replacement for safe harbor. However, businesses of all sizes are already beginning to weigh whether they should simply move their data to European servers over concerns that alternative compliance mechanisms may not be valid. We’ve noted on our blog (and others agree), forced data localization would be incredibly costly - especially for smaller companies - and would have a chilling effect on internet innovation. We’re tracking.

Pros and Cons in SEC’s Crowdfunding Rules. The release of the SEC’s long-awaited investment crowdfunding rules is a huge victory in itself: it facilitates an entirely new form of fundraising for cash-strapped startups. But, are the rules themselves any good? We’ve written previously about changes we wanted to see to the proposed crowdfunding framework, and the SEC’s rules incorporate a few of the items on our wishlist. Specifically, funding portals are now allowed to subjectively decide whether or not to list certain companies on their platforms and may take an equity stake in issuers, too. But, while the new rules ease some of the high disclosure burdens of the proposed framework, they do not go far enough to make investment crowdfunding affordable for small companies. A more detailed look here.

Comprehensive Immigration Reform: Not Happening. Earlier this week, newly elected Speaker of the House Paul Ryan confirmed a suspicion most immigration reform advocates have sensed for years now: that the House will once again refuse to consider comprehensive immigration reform legislation. “I do not believe we should advance comprehensive immigration legislation with a president who’s proven himself untrustworthy on this issue,” Speaker Ryan announced emphatically on “Meet the Press” and repeated in an op-ed Tuesday. But while we won’t expect to see immigration reform on the legislative agenda, we at least expect to hear about it in the 2016 election cycle.

Anti-Airbnb Measures Fails in SF. On Tuesday, San Francisco voters struck down a measure that aimed to curb Airbnb rentals (and those offered by other homesharing services) in their city, where the convoluted conflict between tech and housing is alive and well. Winning the the vote 55-45, Airbnb far outspent its opposition with an $8 million television, billboard, and canvassing campaign against the measure. Among the lessons learned from its victory? Airbnb representatives have said its user base of hosts and guests is willing and ready to mobilize on the company’s behalf, a movement we could see in more cities as Airbnb and other companies come up against new regulatory challenges.

Internet for Everyone in Arkansas. The Arkansas legislature has promised it will have a plan to deliver high speed broadband access to every home, business, and institution in the state by October 2016.  The “call to action” was inspired by similar broadband expansion efforts in nearby states like Kentucky and Tennessee. Arkansas’ House speaker noted that broadband “has become the 4th rail of economic development. It is just as important as your transportation infrastructure, your educational and workforce infrastructure, your tax structure.” We couldn’t agree more and are pleased to see states acting to ensure all of their citizens have access this essential resource.

Former Twitter Engineer: Diversity is Difficult. An essay by a former lead engineer at Twitter is gaining momentum and attention, highlighting the challenges the tech industry continues to confront in making its workforce more inclusive. Leslie Miley recounts his efforts to increase employee diversity at the company, describing frustrating conversations with senior engineers who referred to diversity efforts as “lowering the bar.” The tipping point for Miley was when he pitched his proposal for hiring a ”Diversity Engineering Manager” and was met with suggestions from higher-ups that underscored “the unconscious tendency to ignore the complex forces of history, colonization, slavery and identity.” It was the culmination of these conversations and the refusal by leadership to acknowledge their own “blind spots” that drove Miley to leave.

Podcasting Tech Policy on a16z. Engine Executive Director, Julie Samuels, spoke with Techdirt’s Mike Masnick and the host of the Andreessen Horowitz podcast earlier this week. Together, they covered a “whirlwind tour of current policy issues in tech  -  from patents and IP in China to cybersecurity, privacy, and Safe Harbor in Europe…And the gig economy, talent, and immigration.” That’s a lot of tech policy, and all in under 60 minutes. Listen here!

#VetsWhoTech. In anticipation of veterans day, Engine is highlighting the success stories of veterans who’ve made strides as developers and founders in the tech industry. These stories showcase the great potential of this community to become leaders in the industry, as well as the ways in which government support for their efforts is falling short. Follow the series on Medium.

Cities Support Immigrants as Congress Refuses to Act

Earlier this week, newly elected Speaker of the House Paul Ryan confirmed a suspicion most immigration reform advocates have sensed for years now: that the House will once again refuse to consider comprehensive immigration reform legislation. “I do not believe we should advance comprehensive immigration legislation with a president who’s proven himself untrustworthy on this issue,” Speaker Ryan announced emphatically on “Meet the Press.”

The pronouncement was disappointing, but not surprising. Comprehensive immigration reform—which includes considering amnesty for the country’s 11.5 million undocumented immigrants, funding border security measures, as well as updating the nation’s high-skilled visa system to reflect changing economic demands—has long been a contentious political issue. Yet while comprehensive reform remains a pipedream until at least 2017, immigration reform advocates can look beyond Congress for incremental signs of progress.

The Partnership for a New American Economy, for instance, is highlighting the work being done in cities across the United States to welcome and support immigrants for their noteworthy contributions to these metropolitan areas. Two recent reports highlight immigrants’ impact on the local economies in Cincinnati and Denver. In addition to contributing billions of dollars in spending power, the immigrant community is particularly important to these cities’ tech industries. In Cincinnati, foreign-born workers represent more than 10 percent of local STEM workers, 6.8 percent of the high-tech workforce, and 11.3 percent of all information technology workers. In Denver, more than one in four professional, scientific, or technical service workers are foreign-born.

Other municipal leaders and business communities have recognized these positive results. In late September, the Greater Des Moines Partnership, a central Iowa business alliance, announced efforts to develop a plan to attract more immigrants to the region in order to boost the area's workforce. In Tennessee, where cities like Nashville have seen the foreign-born population double since 2000, a non-profit called Welcoming Tennessee was established in 2005 to highlight immigrants’ contributions to the local economy. The Atlantic reports on how  Welcoming Tennessee spurred a wider movement: “Welcoming America” is now a national network of organizations that help immigrants navigate their new homes and identify resources to help with everything from filing taxes to starting a business.

Earlier this year, we also wrote about several innovative models that support foreign-born entrepreneurs building their companies here in the U.S. The Entrepreneur in Residence program, pioneered in Massachusetts, has recently expanded to Colorado. A new startup fund called Unshackled enables immigrant entrepreneurs to focus on their new ventures by sponsoring their visas.

Finally, some of the President’s executive actions, (the purported reason Speaker Ryan refuses to move forward with comprehensive reform), announced about a year ago, could soon be implemented, making slight improvements to the pathways for immigrant entrepreneurs. United States Citizenship and Immigration Services (USCIS) heard from entrepreneurs, investors, and startup advisors earlier this year when considering new guidelines for granting work visas. We hope to see these guidelines officially adopted soon to create more room for immigrants to start new companies and create new jobs here in the U.S.

As the White House initially stated in its announcement, “there is no substitute for legislation to fix our broken immigration system,” but while we wait for 2017, local policymakers and forward-thinking business leaders shouldn’t be deterred from finding ways to support immigrants and recognize the undeniable contributions they make to this country, particularly as innovators and entrepreneurs.

“Vets Diversifying Tech”: Bringing the Conversation to Washington

In January, Engine launched the Diversifying Tech Caucus, a bicameral, bipartisan Caucus that’s now grown to over 30 members committed to increasing the number of women, minorities, veterans, and other underrepresented groups in the tech sector. Since then, Engine has hosted briefings on the Hill that further this conversation. This week, in light of Veterans Day, we hosted a briefing to highlight the work of veterans in the industry and how Congress can better support them. Moderated by Engine’s Executive Director, Julie Samuels, the panel included Todd Bowers (Director UberMILITARY, Uber), Nicole Isaac (Head of Economic Graph Policy Partnerships, LinkedIn), Steve Weiner (Co-Founder, VetTechTrek), Andrew Kemendo (Founder & CEO, Pair Inc.), and Rob Polston (Recruiter, Amazon Web Services).

The conversation among this group of veterans and tech industry leaders demonstrated the huge potential of the veteran community to succeed in this sector . As Andrew Kemendo put it: “We need strong executors starting companies—and I see no better people for this than veterans.” It also highlighted the ways our policies for veterans fall short. Here’s what we and the audience of over 60 Hill staffers and friends from the veteran community heard:

• We must give veterans a running start BEFORE exiting the military to make them competitive candidates for tech industry jobs. The one week Transition Assistance Program is not enough for transitioning service members; currently, the Department of Labor’s employment workshop is a one-size-fits-all program that still leaves a lot of guesswork for newly transitioned veterans trying to get into the tech industry. Beyond simply accessing more information about appropriate job opportunities in the tech industry, service members should be encouraged to take up additional training or internships before they leave the military and be provided with the support to evaluate career options (and the skills they require) before they transition. For example, Amazon Web Services is partnering with Microsoft to hire some of the graduates of their Microsoft Software & Systems Academy—a 16 week development initiative focused on developing tech-ready, active-duty service members.

• Veteran entrepreneurs need a better network and access to capital. When members transition out of the military, they have little money in the bank and have a far smaller network of potential funders and co-founders than potential entrepreneurs who graduated from Stanford or worked at Google. This puts veteran entrepreneurs at a disadvantage. In order to make the connections they need to build funding opportunities, they need access to mentors and people with experience. The VET Act, introduced by Senators Moran and Tester, allows veterans to use GI benefits towards starting a business, but these entrepreneurs also need experienced funders and advisors that have started businesses and can provide connections to bigger networks, improving access to capital.

• GI benefits aren’t currently supporting the veteran tech talent pipeline. For example, “skills academies” (such as coding bootcamps and hackschools) are not clearly covered by the GI Bill, though these programs are well recognized by the tech sector and would improve the bridge between military resumes and tech company job descriptions. In addition to being a resource for brushing up on valuable technical or business skills in pursuit of landing a job in the tech industry, skills academies also provide a hiring partner network that enables an easier transition from student to employee. VetTechTrek organizes high-impact trips for veterans to leading tech companies and expose veterans to opportunities for training that can jumpstart their career in the tech industry— and skills academies, as they put it, provide “an environment very similar to a military qualification process: a focus on prerequisites and only the essential skills to complete the task.”

Veterans have notoriously been an underrepresented community in the tech sector. But this panel (as well as the veterans featured in our latest booklet “Supporting Vets Who Tech”) demonstrated that there is room for the government to proactively make changes, working in conjunction with industry players, to improve veterans’ access to jobs in the tech industry. We look forward to working with members of Congress on policy efforts aimed at strengthening the veteran tech talent pipeline.

DOE Pilot Improves Student Access to Tech Bootcamps

Last week, the Department of Education announced a pilot program that will allow federal financial aid to be used toward coding bootcamps and similar “nontraditional” educational programs. The EQUIP (Educational Quality Through Innovative Partnerships) program will make it easier for students who rely on federal aid to access these in-demand educational programs. It will also provide an opportunity for the Department to evaluate the effectiveness of these programs and explore how to best monitor their quality.   

In recent years, the prevalence and popularity of coding bootcamps and other nontraditional education programs have skyrocketed. According to the Education Department, coding bootcamps will graduate 240 percent more students in 2015 than they did in 2014, up from 6,740 to over 16,000 graduates.

This growth is not surprising—as the 21st century economy requires an increasing number of skilled workers, these institutions have risen to meet demand. The courses they offer help to alleviate current pipeline problems by channeling talented individuals into open, high-paying positions. General Assembly, one of the largest and most established bootcamps, reports a 99 percent placement rate in the field of study. And overall, 75 percent of coding bootcamp graduates are finding employment in their field of study and see a 44 percent increase in income according to a 2014 study.

However, there is still a significant roadblock in place: students of most of these nontraditional programs do not qualify for federal financial aid.

Imagine this: you’re a single parent working in an entry-level programming position. You’re looking to advance your career and have read about the emerging field of data science. You don’t have the resources—time or money—to attain a four-year degree in data science, but you find an interesting immersive “bootcamp” program that will train you in data science in just twelve weeks.

Even though this specialized program will train you at a fraction of the cost and duration of a traditional degree, in most cases you would not be able to obtain a federal student loan to help pay for it.

There are two main reasons for this: First, in order for an institution to be eligible for federal aid, it must be accredited. The accreditation process is complicated and ill-equipped to assess these sorts of innovative programs whose courses are constantly evolving based on market demand. As we’ve written before, nearly all modern coding bootcamps and schools lack accreditation.

Compounding the problem is a restriction on accredited colleges that limits the types of partnerships they can have with nontraditional education groups. For example, colleges offering federal aid cannot outsource more than 50 percent of any given program to third party institutions. So, if a resource-deprived community college wants to partner with an outside institution to offer a new program in an emerging field like data analytics, they can only do so if the outside institution offers less than 50 percent of the curriculum, assessment, or faculty.

These limited partnerships have been successfully attempted by several educational companies—General Assembly with Boca Raton's Lynn University; edX with Arizona State University; Galvanize with the the University of New Haven—but there is still huge untapped potential being stifled by overly-restrictive and outdated rules.

The EQUIP program aims to change this by loosening restrictions on schools that want to do innovative work with an alternative education provider. The program waives the existing 50 percent outsourcing prohibition for selected institutions under two conditions: a third party “Quality Assurance Entity” evaluates the outside partner and the college’s accreditor approves it.

While the scope of the pilot will be relatively small, this balanced step will allow the Department to evaluate a model that could later be expanded to cover any partnership between an accredited institution and a nontraditional program.  

Right now the innovation economy desperately needs skilled individuals. Creative initiatives like the EQUIP program are a sensible way for the federal government to rise to meet this challenge and we hope to see more efforts like this one in the future.

Startup News Digest 10/16/15

Our weekly take on some of the biggest stories in startup and tech policy.

Federal Aid for Coding Bootcamps. On Wednesday, the U.S. Department of Education announced a new pilot program that will make it easier for a more diverse range of people to attend alternative education programs like coding bootcamps. Until now, students enrolled in “nontraditional” educational programs have not been eligible for federal financial aid.  The new EQUIP (Educational Quality Through Innovative Partnerships) program will waive existing restrictions to allow federal aid dollars to be used towards approved alternative programs. While the scope of the pilot will be relatively small, this initiative is a great move by the Dept. of Ed towards making these popular and essential programs more accessible to all.

White House Opts Against Legislating Back Door for Encryption. At the end of last week, the White House made a long awaited decision: they would not push for legislation that would mandate companies be able to decode messages at the request of law enforcement. At least, that’s what they’ve decided for now. Even if the White House’s decision maintains status quo, advocacy groups worry about the White House’s definition of “strong encryption” and whether the Administration will “weaken security through other methods.”

EU Safe Harbor Ruling. Ars technica takes a deeper look at the far-reaching consequences of the EU’s safe harbor ruling in an article published on Thursday. Evan covered the impact this ruling will have on startups in a blog post last week, noting that “while larger companies have quickly moved to establish new legal pathways for importing EU data or have secured data centers in the EU, smaller companies face a more daunting task in trying to comply with now unclear data protection rules.” Ars goes even further, arguing that this ruling will have a dramatic effect beyond short-term global commerce—it will likely impact future trade agreements between the U.S. and EU, as well as the UK’s surveillance practices.

Evidence of “Over-Removal” by Intermediaries. When intermediaries receive a take-down request, the easiest, least risky response is to take down the cited material - especially for small companies that don’t have the resources to hire a legal team to thoroughly evaluate each request. A literature review by Stanford revealed growing amounts of empirical evidence of “over-removal” by intermediaries (e.g. Google, Twitter, Facebook), further defining a problem that puts free-expression at risk.

Wyden Calls for Greater DMCA Exemptions. As the U.S. Copyright conducts its periodic review of requests for exemptions under the Digital Millennium Copyright Act (DMCA), the agency should consider the importance of these exemptions to the  continued expansion and improvement of American technologies, Sen. Ron Wyden explained in this week’s Wall Street Journal. Wyden expressed his concerns about the EPA and FDA’s pleas to limit exemptions for new software in cars and medical devices, thereby prohibiting such new technologies from being legally tinkered with under the DMCA. Sen. Wyden and Rep. Jared Polis (D-CO) have introduced the Breaking Down Barriers to Innovation Act, a bill that aims to streamline “the process to obtain exemptions to the DMCA to promote scientific research, innovation and the fair use of copyrighted works.”

Better Crowdfunding Policy. In anticipation of the SEC’s impending release of the Title III crowdfunding rules, Engine published a white paper this week, “Financing the New Innovation Economy: Making Investment Crowdfunding Work Better for Startups and Investors.” The paper analyzes trends in U.S. and U.K. crowdfunding markets, which offer important lessons for U.S. regulators and lawmakers as we move closer to launching investment crowdfunding for retail investors.

In Celebration of Ada Lovelace. On Tuesday we commemorated Ada Lovelace Day and celebrated the achievements of the first programmer and women in science and technology everywhere. News from Stanford emphasized progress: 214 women have enrolled as computer science majors, 30% of all enrolled computer science students.

Startup News Digest 10/9/2015

Our weekly take on some of the biggest stories in startup and tech policy.

ECJ Invalidates Data Safe Harbor. On Tuesday, the European Court of Justice (ECJ) invalidated the European Commission’s “safe harbor” rules that permitted U.S. companies to self-certify compliance with European data protection rules in order to legally transfer EU customer data to the U.S. The court determined that U.S. legislation permitting the NSA to secretly collect and review consumer data was inconsistent with the EU’s Data Protection Directive. Consequently, the safe harbor framework was itself inconsistent with the Directive, as U.S. companies could not claim to have adequate data security protections in place. While larger companies have quickly moved to establish new legal pathways for importing EU data or have secured data centers in the EU, smaller companies face a more daunting task in trying to comply with now unclear data protection rules.

Governor Brown Signs CalECPA. In a huge victory for startups and digital privacy, Governor Jerry Brown signed the California Electronic Communications Privacy Act (SB178), now the nation’s best digital privacy law, on Thursday. This landmark bill (which we’ve covered in past digests) updates digital privacy laws by requiring law enforcement to obtain a warrant before accessing an individual’s electronic communications. We are hopeful that this action by California will prompt similar movement in other states or at the federal level.

Closing the Gender Gaps. California passed a (another) landmark piece of legislation that would require women to be paid the same as men for doing “substantially similar work.” Though the governor acknowledges that this bill won’t solve the problem, he expects it to “help accelerate [the] progress.” It’s an interesting development in light of the dialogue in Silicon Valley regarding the promotion and retainment of women in the tech industry. Meanwhile, on the federal level, Senators Maria Cantwell (D-WA), David Vitter (R-LA) and Jeanne Shaheen (D-NH) introduced a bill that would reauthorize and increase funding for the Women’s Business Center Program, which improves business training and counseling opportunities for women entrepreneurs.

Capital Formation Bills Pass in House. The House passed two bills earlier this week aimed at making raising capital just slightly easier for startups. H.R. 1525, the Disclosure Modernization and Simplification Act and H.R. 1839, the Reforming Access for Investments in Startup Enterprises Act, contain measures that simplify and codify some of the regulations that govern how growing private companies raise capital. It’s encouraging to see members of Congress seek out ways to support capital formation for our country’s emerging companies and we hope our senators follow suit.

Marco Rubio Addresses Tech in NYC. Civic Hall hosted Senator Marco Rubio this week to talk about the on-demand economy. He spoke to the advantages of working for on-demand services, (flexibility of hours, mobility of work,) and recognized the need for a middle ground status between W-2 employees and independent contractors. He also called out incumbents, such as the taxi and hotel industries, for hindering innovation. It is the role of the government, Rubio said, to help those displaced by the new economy access the new economy through education and other opportunities.

Regulating Drones. As the popularity and pervasiveness of drones, (or unmanned aerial systems, UAS,) increases, lawmakers are grappling with the best way to ensure safety and privacy without needlessly inhibiting innovation in this growing industry. On Wednesday, Representative John Garamendi (D-CA) and Senator Barbara Boxer (D-CA) introduced the SAFE DRONE Act of 2015, which prohibits drone flights within two miles of an airport or active fire. While some argue these sorts of rules should be left to the Federal Aviation Administration to craft, others are growing tired of waiting on the agency to act after it missed a Sep. 30 deadline to implement drone rules.

Startup News Digest 10/2/15

Our weekly take on some of the biggest stories in startup and tech policy.

Rise of the Rest Tour. Engine spent the week traveling with Steve Case on the Rise of the Rest road trip to celebrate entrepreneurship, in all its forms, across America. Check out our posts on our visits to Baltimore, Philadelphia, and Buffalo.

#Visagate2015. An unexpected, last-minute policy change by the Department of State blindsided thousands of highly skilled immigrants seeking green cards, leaving them ineligible to apply and frustrated by yet another delay in the unreasonably tedious application process towards permanent residence. So frustrated, in fact, that a number of them have sued the State Department. This is not the first time immigrants have had their green card hopes dashed by an agency about-face—there was a similar fiasco in July 2007.  And as Emma writes, this represents “yet another indication of how our broken immigration system is plaguing the entrepreneurial ecosystem.”

A Fireside Chat with CTO Megan Smith. On Thursday night, U.S. Chief Technology Officer Megan Smith sat down with Khan Academy founder Salman Khan at the Nourse Theater in San Francisco to talk about the intersection of technology and public policy. As a former Google executive and the founder of her own media company, Megan Smith has a unique understanding of how bringing TQ (or “technology intelligence,” as she has termed it) to the public sector can help build a better government. She touched on a number of issues, including the importance of connectivity, STEM education and even prison reform. We took special note when she called on the audience to work together to improve diversity in tech. “We should be bringing our neighbors’ kids to work,” she said, arguing that diversity should be in the top three priorities at a company, rather than the top 20.

Bringing the ‘Techies’ to Congress. CTO Megan Smith also touched on the need for the “techies in Silicon Valley” to do a “tour of duty” in the government. A new initiative led by the Open Technology Institute hopes to facilitate just that. Beginning in 2016, the Congressional Innovation Fellowship program will place technologists in Hill offices to help “inject greater technical expertise into the policymaking process.” This program represents just another way in which the federal government is trying to bridge the gap with tech and prove that policymakers can be innovators too.

T-Mobile Plans to Buy Enough Spectrum to Cover Entire U.S. T-Mobile CFO Braxton Carter reiterated some good news on Thursday—the company is aiming to purchase enough spectrum in next year’s incentive auction to cover the the entire U.S. We’ve talked before about why competition in the wireless market matters to startups, and we even wrote a letter to the FCC earlier this year advocating for safeguards that would improve the ability of competitive bidders like T-Mobile to play in this historic auction. With Sprint’s announcement last weekend that it plans to sit out the upcoming auction, we are thrilled that T-Mobile is still planning for robust participation.

The Federal Government Wants in on Crowdsourcing. In an op-ed published in Wired earlier this week, Senator Chris Coons (D-DE) revealed the Crowdsourcing and Citizen Science Act, which would give federal agencies the explicit authority to use crowdsourcing. According to Coons, the federal government is not prohibited from collaborating with the public to solve problems, but a lack of explicit authorization deters many agencies from taking full advantage of this option. He notes that “many of our nation’s challenging problems and questions can most effectively be solved and answered with the public’s help if they are given the chance.” We couldn’t agree more, and are happy to see legislation that would encourage these sorts of creative and inclusive approaches to policymaking.

Michael Petricone has “the best job in DC.” A Morning Consult write-up gave Engine Board Member and CEA’s SVP of Government Affairs, Michael Petricone, some much deserved recognition for his efforts to get Washington and tech companies on the same page. It’s a tough job, but somebody’s got to do it! And nobody tells tech’s story better than Michael.

Visagate 2015 - The Latest Example of America's Failed Immigration System

Today, thousands of foreign nationals who have been waiting for years to apply for green cards will finally be able to do so. However, a last-minute policy change by the Department of State last week rendered a large portion of these immigrants ineligible to apply—pulling the rug out from under them and forcing them to wait even longer before they can take the final steps towards becoming a permanent resident.

We all know our immigration system is broken. It is so backwards that hard-working, high-skilled foreign nationals who are in the U.S. on temporary visas have to file a petition just so they can hold their place in line to later submit another application for permanent residence. Sound complicated? It is. If you want to see for yourself, you can read the U.S. Citizenship and Immigration Service’s process for “adjustment of status” here (but unless your idea of fun is a trip to the DMV, you should probably skip it).

This insane bureaucracy is partly a result of the outdated Immigration Act, which placed limits on the number of visas and green cards that can be issued each year. The law was passed in 1990, long before anyone could have predicted the technological boom of the last 25 years or the resulting need for high-skilled employees. Today, demand far exceeds supply for both temporary visas and green cards. This has led to huge backlogs that force millions of immigrants, many of whom are already living and working in the U.S., to wait in line for years for a green card (in some cases, upwards of 20 years). During this wait time it is difficult, if not impossible, to switch jobs, start your own company, or even go back to school.

Since the number of available green cards is limited, each month the Department of State publishes a bulletin that outlines who can apply for one. Eligibility is determined by the date on which an immigrant filed their initial petition—basically, if you filed before the date listed in the bulletin, your time on the wait list is up and you can finally submit your green card application.

Last Friday, the Department of State published a revised visa bulletin for October that pushed up the eligibility cutoff dates—in some cases by more than two years. In other words, thousands of foreign nationals who thought they would be eligible to apply for green cards on October 1st found out just five days before the filing deadline that they will have to continue to wait.

This back-track by the Department of State is hugely frustrating for these individuals and their sponsoring employers, and is yet another indication of how our broken immigration system is plaguing the entrepreneurial ecosystem. Outdated, unreasonable limits on green card availability exacerbate the national talent shortage and threaten innovation and startup growth.

Legislators can fix this, and in fact, some have tried. Congress had the chance in 2013 when the Senate passed a comprehensive bipartisan reform bill, but efforts were stalled by partisan bickering and bogged down in election-year politics. However, there may be an opportunity to revive immigration reform through a somewhat unexpected channel—Speaker Boehner’s departure from House Leadership.

As the New York Times Editorial Board wrote last week, Mr. Boehner’s surprising retirement means he’s no longer beholden to the internal party politics that stymied any attempts to work on large-scale immigration reform legislation. While the prospects for sensible immigration reform remain a long shot as the 2016 election approaches, those of us that care about fixing our broken immigration system should seize any opportunity to push for legislators to take up the issue. Until Congress passes meaningful reform, talent-starved startups will continue to suffer while the brightest and best foreign nationals have their hopes of permanent residence dashed and delayed by a broken system.