JOBS Act Becomes Law

I was honored to represent the startup community across America this afternoon as a guest of President Obama in the White House Rose Garden as he signed JOBS Act into law. This bi-partisan bill will do great things for our community; through increased ability for companies to go public, raise money through crowdfunding or scale their products and businesses into the marketplace with greater ease.

The President, along with House Republican Leader Eric Cantor who introduced the bill in February, Sens. Jeff Merkley and Scott Brown who worked tirelessly on the crowdfunding issues, and many others in both parties and both Houses of Congress are to be thanked for making sure this legislation passed with the support and speed that it did. With Engine, I look forward to helping many new startups benefit from this law, and continuing to work with the Congress and the President to pass further legislation aimed at helping startups continue to drive the Engine of the American economy.

Alan Simpson Talks Tech Safety for Kids

Alan Simpson is a veteran of traditional media, having cut his teeth at C-SPAN and NPR, before moving on to advocacy in the tech space with a particular focus on opportunities for children and learning. He currently works at Common Sense Media, and lives with his wife and mutt in San Francisco. This post represents his personal views, and not necessarily those of any organization.

I spend a lot of time with people working in technology, and even more time with parents and teachers who might be described as less than comfortable with technology. It’s no surprise that conversations in the startup world focus on the many opportunities and improvements created by the Internet and technology. On the other hand, when talking with parents, teachers, and policymakers, the conversation hinges not just on the upsides of technology, but also on the serious concerns many of this group have about potential downsides for children.

Many parents and educators are embracing the benefits of digital technology, and are hopeful about opportunities for personalized learning innovations that can be accessed in school, at home, and many places in between. But there are also parents who worry about trouble their children may get into with technology. The perceived problems are as varied as the parents – issues ranging from porn and piracy to child ID theft and the risk of jeopardizing college applications.

Some people might be tempted to dismiss the concerns of parents, but we should all recognize that worrying about children –- and weighing upsides and downsides -– is a big part of their jobs.
When I talk with parents and educators, I usually stress the importance of finding balance, and of engaging with new platforms and tools, so that they can make smart tech choices for their children, and perhaps more importantly, teach their children to make smart choices as they grow. This works in many cases, but sometimes I encounter parents or teachers who are frustrated, and know that they understand tech less than children do. They wish there was an off switch, or a time machine to make the Internet disappear. As we’ve seen recently, some policymakers agree.

It’s important to remind them that there is no time machine, and that kids are going to embrace digital technology, just as they’ve always embraced innovation. Parents, teachers and all adults can, and should, help teach kids to make smart choices about technology. What we can’t do is tell a generation of kids to stay offline, because they’re going to live their lives online.

This can be a challenging conversation, and it may be one most tech folks don’t want to have. But it’s a crucial conversation, and startups need to be part of it. Because in the end, the biggest potential digital downside for our nation’s children is that we may block them from technology innovations that can significantly improve their opportunities for learning, and help them prepare for the digital world where they will live, work, play, bank, vote, and more.

Child Protection in the Digital Age

This week, Engine is fortunate to have Alan Simpson (no, not the former senator of Wyoming) posting here about online child safety. We’ll be seeing that post later this week, but in the meantime, we want to share the scope of the existing debate around the pros and cons of new media for the under-13 set.

Here’s a little background: the main piece of legislation that has dealt with children’s safety online for the past decade is the Children’s Online Privacy Protection Act of 1998 (COPPA). COPPA mandates specific requirements that web operators must adhere to for children under that age of 13 — namely requiring parental permission before collecting any personal information from children and not distributing the information to third parties. Standard stuff.

The bill was written over ten years ago, though, and technology has changed markedly in that time — social media, smartphones, and tablets have made COPPA both restrictive in some areas and inadequate in others. Amendments were proposed last year by the FTC to ease the way for parental authorization and to institute additional protections for location based and facial recognition technologies.

The FTC amendments were lauded by the internet community, who had long seen COPPA as a thorn in its side. The legislation, for instance, prevents children under the age of 13 from signing up for Facebook, which CEO Mark Zuckerberg said impedes the educational potential of social networking. Zuckerberg may not be the most impartial commentator on the issue, but he is not alone; plenty of others advocate for the educational possibilities of new technology.

Alan Simpson is one of those advocates. His argument? It doesn’t matter whether you think the internet is good or bad — It’s not going away. This is a world in which kids are growing up and media is a huge part of their lives. There are enormous positives that come out of that, and there are also things that you as a parent might decide are negative. The positives are pretty universal: the opportunities especially in education and learning that new media create for kids and adults are widespread. Giving people more tools to address the downsides — without dismissing the positives — allows parents to maintain the ability to be a filter without having to completely ban a technology which is an integral part of our lives now and will be even more so in 10, 20 years time when these kids are entering the workforce.

Look out for Simpson’s post here in the next couple days.

JOBS Act Passed, With Additional Investor Protections

Minutes ago, startup financing bill JOBS Act passed the Senate 73-26, with an amendment to further protect investors.

The bill, which we discussed here, seeks to ease the way for startups to access investment capital through provisions that address the transition between being a privately held company and a publicly traded one — eliminating the 500 shareholder cap, allowing general solicitation and crowdfunding, creating an IPO onramp — and provides startups with more financial pathways to success.

Concerns that greater access to investments — especially through the crowdfunding provision in the bill — prompted fears from many quarters that investors would be opened up to fraud, or worse, that a “free-for-all” environment for investing in startups would create a reiteration of the dot-com bubble burst. An amendment offered by Sens. Merkley (D-OR) and Brown (R-MA) passed along with the bill which addresses these concerns.

The amendment requires companies raising up to $1 million to be transparent with potential investors about certain financial information, and prevents investors with an income lower than $100,000 from investing more than 5% of their annual income.

JOBS Act always called for “reasonable protection” of investors against fraud, and now the Merkley/Brown amendment further distinguishes what safeguards will be extended on behalf of investors. Another amendment offered by Sen. Reed (D-RI) that changed the definition of the “emerging growth companies” that JOBS affects was rejected.

The Merkley/Brown amendment means the bill will go back to the House before being signed into law by the President. We’ll be tracking.

Policy Update: JOBS & Startup

Last night, we sent out the following email to our friends and members to inform them of current legislation aimed at easing the way for startups. We want to share the update with you now, as a resource for understanding key provisions of JOBS Act and Startup Act, and to hear your thoughts on these bills. If you want to sign up for email updates like this in the future, subscribe to our mailing list here.

Dear Friend,

Engine has been tracking recent legislative efforts to foster entrepreneurship and small business. Today, the Senate begins debate on the JOBS Act, which passed the House last week. Startup Act is next on the legislative agenda and responds to a number of key startup needs.

JOBS Act

The JOBS Act is a legislative package designed to lower barriers to entry for entrepreneurs by reducing limitations on fundraising and decreasing crippling bureaucratic overhead currently required by existing regulatory legislation. While there’s good and bad contained within it, it is heartening to see Congress prioritizing legislative issues that affect startups. You can read about the provisions we like in the JOBS Act.

• Ease of raising capital through crowdfunding and ease SEC regulations on offerings from $5 million to $50 million, making it easier for startups to raise capital.
• Create IPO onramp for class of emerging growth companies with annual revenue of less than $1 Billion.
• Emerging growth companies are subject to fewer SEC regulations when filing for IPO

But JOBS is just the beginning.

Startup Act

It’s time to move forward on Startup Act. We have only a few weeks left to effect change in Congress this session, and Startup Act represents another clear step toward passing legislation that benefits entrepreneurs and creates jobs -- this year. We also took a look at some of the key provisions in Startup, here’s a quick summary, with more detail available on our blog.

• Promote job growth by making the capital gains tax exemption for startups permanent.
• Reform the process by which qualified STEM graduates and foreign born entrepreneurs are able to stay and start businesses in the United States
• Spur innovation by providing incentives for universities to turn federally funded research into tangible jobs and businesses.

To take action on JOBS Act, sign the petition at AngelList here. And stay tuned, in the coming weeks we’ll ask you to take further action in support of Startup Act.

-The Engine Team

The Future of Music: is Entrepreneurship

About a month ago, we posted about a study we sponsored entitled The Sky is Rising. The findings of the research confirmed that the moral panic surrounding the purported demise of creative industries (music, film, publishing) is largely unwarranted. The fact of the matter is, fuelled by increased exposure and new methods of distribution, our creative industries are actually growing rapidly. What’s more, the artists are seeing more direct financial benefit than before, and are more in control of their careers -- which goes a long way toward explaining the chagrin of traditional content distributors (record labels, big name publishers), who lose out in a scenario where a middle man is no longer required.

Today in Austin at SXSW Music, the Future of Music Coalition released research that explores the revenue streams of musicians. The findings of the research follow the same vein as The Sky is Rising: artists across all genres are collecting a relatively low percentage of their incomes from affiliations with record labels, and instead are generating revenue across many different, self-directed revenue streams (The FMC identified over 40 different revenue streams associated with a music career).

The upshot is, musicians -- and especially musicians who are “full-time” and earn all of their income from music -- are a lot more like entrepreneurs than anything else. While the findings showed an across the board reliance on revenue streams associated with performing, and performing costs were not scalable, performances were crucial to generating other revenue streams -- such as sales of CDs and merchandise. The FMC study not only presents a valuable data set, it also gives us a new way of conceptualizing the music industry. New technologies, like it or not, have changed the face of the industry; traditional gatekeepers no longer dominate the industry and there is now much more room for the “self-employed” artist.

We encourage you to go and check out the study, and chew on the findings. Let us know what you think. Will small-business music ever really replace traditional record labels?

Advocating for the Intersection of Policy and Technology at SXSW

The Engine Advocacy crew is on its way home from its first SXSW. We found ourselves among friends there: entrepreneurs trying to build partnerships, consumers looking for the next great app for business or personal use, investors in search of the next high growth or long-run bet, reporters who actively engage with new media channels, and activists who, like us, want to advance policy that fosters new technologies and technology startups.

Engine’s panel featured a cohort of voices that had been active against SOPA and PIPA -- Andrew Rasiej, the chair of NY Tech Meetup; Mark Stanley, the leading communications voice from the Center for Democracy and Technology; Laurent Crenshaw, the legislative director for Rep. Darrell Issa; Mike McGeary, Engine co-founder and director; and Boonsri Dickinson from Business Insider, who moderated the panel.

The panel was both a discussion of the tactics that made the SOPA/PIPA protests so effective, and of how to use those tactics and others to mobilize the SOPA and PIPA protesters to take a proactive stance on tech policy issues in the future. This has consistently been a sticking point,for all types of advocacy -- how do you take the momentum gained from one urgent campaign, and turn it into sustained, positive action to advance a long term agenda? While the tech community might find it easy to block or defend against a piece or type of legislation, we have yet to determine the best advocacy tools for actively promoting legislation we like.

Our stance: the community needs compelling data that it can take to members of Congress to expand the knowledge on specific legislation, and we need to connect members of Congress directly with startups that employ their constituents.

In essence, we need to facilitate a really effective conversation.

This became more and more evident as we circulated the conference, meeting with entrepreneurs who were pitching innovative, useful products and services and building the businesses to support them; and seeing a fundamental disconnect between this sphere and that of policymakers. This was cemented when we met with Senator Jerry Moran (R-KS), who restated his commitment to assisting startups and fostering high-growth businesses in Kansas, and throughout the country. He highlighted the divide between the tech and non-tech communities by pointing out his own sense of being an outsider sitting at the table with a bunch of tech folks. This discomfort, which seems to be a common problem for members of Congress, clearly stems from a lack of effective communication.

The best possible outcome would be to educate policymakers about what we do; to make technology less alien, and to present them with hard data that proves the overarching value of what we do. The Kauffman Foundation leads on researching these issues, but there are many other groups working toward this goal. We’re working on some exciting research as well that we think can help shift the debate. This easy, effective communication we’re talking about may not happen overnight, but we’re confident that it will happen. Getting together in Austin was a great next step in the process. We look forward to the next phase -- the action phase -- as we move forward.

IPO On-Ramp For Emerging Growth Companies

Bill of the week: S.1933, or the Reopening American Capital Markets to Emerging Growth Companies Act of 2011. You might also know it as the Sub $1 billion Revenues IPO Act -- a shortened working title conferred by Fred Wilson at A VC, who championed the bill last Friday.

The bill amends the Securities Act of 1933 and Sarbanes Oxley to ease the time and financial burden of regulatory compliance for small companies going public. Specifically, the legislation would give “emerging growth companies” -- companies with revenues of less than $1 billion -- five years to comply with SEC regulations for an IPO. The temporary exemptions would allow smaller companies an eased path to IPO, while maintaining compliance obligations that protect investors. Eased regulations for IPO would give smaller companies greater access to markets and capital at a critical stage in their growth.

This bill corresponds to part of the Obama Administration’s Startup America Legislative Agenda, a detailed list of priorities released a month ago to spur job creation by addressing the needs of start-ups. We wrote about the agenda in detail here.

You probably already know how vital start-ups are to job growth -- Kauffman research shows that start-ups are responsible for nearly all net new job growth in the country since 1977. But in case you need a refresher, this video is short, sweet, and explains the issues well. Bottom line? Election year or no, stimulating job growth and the economy is a non-partisan issue.This is an important bill, and one that we want to see passed sooner rather than later.

Beyond SOPA/PIPA at SXSW

We're pleased to announce an upcoming panel we're hosting at this year's South by Southwest Interactive Conference in Austin, and we hope that you can join us for a lively discussion. We've put together a great collection of people from the intersection of tech and politics who will take a look at the next phase in advocacy for the tech community on the whole, what we learned from SOPA and PIPA, and how we can keep people engaged to take a more active stance on tech policy and legislation going forward to help guide that debate and work with legislators and regulators to make better choices when it comes to tech and government.

Joining us for the discussion are:

Michael McGeary, Co-Founder/Director, Engine Advocacy

Andrew Rasiej, Founder, Personal Democracy Media

Mark Stanley, New Media, Center for Democracy and Technology

Laurent Crenshaw, Legislative Director, Office of Rep. Darrell Issa (R-CA)

Boonsri Dickinson, Reporter, Business Insider

EVENT DETAILS:

Beyond SOPA/PIPA: Moving Forward with Tech Advocacy

5:00pm CST, Saturday, March 10

AT&T Conference Hotel, Salon C

Note: As this is an official SXSW event, a badge must be presented to join us.

We hope to see you there!

User/Entrepreneur

A Kauffman Foundation study shows that innovative startups are largely founded by users who create products for their own use and then commercialize them -- an inspiring statistic that bears witness to the fact that innovation is closely related to democratic entrepreneurship and economic growth.

A study released today by the Kauffman Foundation looks for the first time in any significant detail the statistics on “user-entrepreneurs” -- entrepreneurs who make products for their own personal use -- and found that these types of entrepreneurs were particularly prevalent in innovative startups, comprising 46% of innovative startup founders.

The study tells us what we have known anecdotally for some time - innovation is intuitive, personal, and easy to sell. User entrepreneurs are not only more likely to get venture capital financing from the outset for products they build with a business purpose than other kinds of startups, but those who create their products for personal use are also more likely to have women and minorities as founders.

Read more about the study here. We’re looking forward to seeing more research that hones in on the amazing potential of bottom-up innovation.

Spectrum: Solved? Not Quite.

A week ago, H.R.3630 passed the Senate, ending the spectrum stalemate that had been ongoing between mobile broadband operators, cable companies, and innovators to gain access to a dwindling supply of spectrum licenses. We wrote a longer piece examining the issues behind the stalemate and tentatively hoping the legislation could help us avoid a spectrum crunch.

Larry Downes wrote a really informative post on CNET this week warning that this may not be the case, for the following reasons:

• The FCC said that mobile users will need an additional 300MHz of spectrum by 2015, and an additional 500 MHz by 2020. Problem is, legislation or no legislation, there isn’t that much usable spectrum to go around. Nowhere near enough, according to Downes.
• There is spectrum which is not being used(including swathes of warehoused government spectrum), or not being used to its full capacity, but the nature of the FCC’s “increasingly outdated licensing system” makes it extremely difficult to re-purpose this spectrum to be more effectively used with today’s technologies. The new legislation takes steps to fix this, but we won’t see results of this for probably 10 years -- seven years too late for the aforementioned 2015 deadline.

All of which sounds pretty sinister.

But Downes advocates for the following short to medium term solutions to help close the gap and keep us from mobile broadband disaster. While not negating the threat entirely, they might at least constitute better solutions than burying ones head in the sand and hoping against all hope that spectrum learns how to multiply itself organically.

• Let them merge. When mobile carriers merge, they tend to make better use of limited bandwidth.
• Build more cellphone towers. Local zoning authorities can make it difficult for cell phone companies to update and add to their core infrastructure, which is the next best option for these companies to optimize their services without additional spectrum.
• Let’s all get new phones. Newer technologies make better, more efficient use of spectrum, particularly in the 4G LTE band. If everyone switched over, and there was tiered pricing plans for data use, we could suck a little more spectrum toothpaste out of the tube.

Ultimately though? We’re with Downes on this one: we need to rethink spectrum. We need to spend time hashing it out and crafting legislation alongside innovative processes that will work with our constantly evolving needs. We need to turn spectrum licensing into a responsive and nimble machine instead of a lumbering beast that needs massive overhauls every decade just to keep the system from complete collapse. So let’s look at this as an opportunity, rather than a disaster; as a chance to help shape long-term policy that fosters innovation.

Let us know what you think. Head over to Step2 to tell us your thoughts on spectrum as part of the innovation agenda.

JOBS Act Announced. Let's Get to Work.

The Senate is stalling on actions taken by the House to grow job creation, and if they won’t take them up individually, House Majority Leader Eric Cantor (R-VA) hopes the Senate can consider the bills all at once. Cantor today announced House Republicans would bundle a number of entrepreneur-friendly bills focused on aiding startups in gaining better access to markets and capital, easing regulations to allow crowdfunding, and raising thresholds for compliance. Cantor detailed the plan, dubbed the Jumpstarting Our Business Startups (JOBS) Act, in a POLITICO op-ed published earlier today.

The package includes the following bills:

H.R.2940, - Access to Capital for Job Creators Act

Passed in the House, this bill would revise regulation D offerings to relax limitations for qualified investors to sell securities. Currently, regulation D allows some businesses to sell securities without registering them with the SEC. H.R.2940 would make it simpler for startups to raise capital through crowdfunding by removing the regulation D prohibition of general solicitation and general advertising for accredited investors.

H.R.1070, S.1544 - Small Company Capital Formation Act of 2011

This bill would amend the Securities Act of 1933 to exempt from SEC regulation a class of offerings between $5 million and $50 million, with a provision to review and increase this figure biennally. The Securities Act of 1933 capped exemption at $5 million and is long overdue for an update. Increasing the breadth of exemption would make it simpler for startups to raise capital and still be in compliance with SEC regulations.

H.R.1965, S.556, S.1941- To amend the securities laws to establish certain thresholds for shareholder registration, and for other purposes.

This bill would amend the Securities Exchange Act of 1934 to increase the threshold from $1 million to $10 million for shareholder registration for an issuer of securities. As with the Small Company Capital Formation Act of 2011, this would ease regulations and make it simpler for startups to gain access to capital and still be in compliance with the SEC.

These bills are no-brainers, and what’s more, many of these provisions appear in the President’s Startup America legislative agenda, released in late January. In our view, what’s good for startups is good for job creation and the overall economy. Now let’s get them through the Senate.

What else should legislators consider this year? Tell us over at Step2 and help define the Innovation Agenda.

Techdirt Hit by Phony DMCA Takedown

Another SOPA-in-practice moment: Our friends at TechDirt have had an anti-SOPA/PIPA post taken down in the name of the Digital Millenium Copyright Act (DMCA).

Only problem is, there’s no infringing content to be found anywhere near the post. Not in the post itself, not in any of the comments. Nowhere. Which, since the post has now been surreptitiously disappeared from search engine results, is more than a little worrying, as it gives substance to the fear that anti-copyright measures can be and are used to suppress free speech. The Techdirt team was given no notification of the takedown or opportunity to remove the so-called infringing content, either. They stumbled on it a month later doing a regular Google search.

And given that the post that was taken down was a primer on how to fight SOPA/PIPA copyright legislation, it all leaves a pretty bad taste in the mouth.

Read the Techdirt post here. We’ll be watching what happens.

What's Next?

We want to know what issues around technology and innovation are important to you. Our friends over at Techdirt have created a Q&A platform on which you can vote up the issues you care about most, and add your voice to the conversation about how to implement positive policy change.

In the fight against SOPA and PIPA, the internet community proved itself to be active, engaged, and capable of achieving real influence in Washington. A groundswell of action against these bills erupted all over the nation, and through this action, we as a community were able to directly influence the policy that affects us.

Even though we halted the beast, we still have a long way to go on making sure any future antipiracy policy is developed with reference to the needs of the internet community.

We need to get involved in these discussions sooner. We need to bring to the table what matters to us, and get involved in shaping policy that works for us so we’re not just reacting to bad legislation.

Let us know what matters to you most, and we will work with you to help implement policy that will work for you, your company, and your future.

Visit the Techdirt/Engine Innovation Agenda thread to let us know what matters to you.

Combatting America's "Brain Drain"

“America no longer has a monopoly on knowledge”.

So said Vivek Wadhwa; tech entrepreneur, academic and one of the panelists at an information summit we went to today for the Entrepreneurs in Residence (EIR) program. EIR is a Department of U.S. Citizenship and Immigration Services (USCIS) led initiative to get entrepreneurs, experts, and USCIS staff together to discuss the problems and possible innovations around immigrant investors, entrepreneurs, and highly skilled workers, and today was the initiative’s official launch.

The initiative aims to combat “brain drain” -- the idea of highly-skilled workers leaving the US after getting their education here to start businesses in their homelands --by moving on skilled immigration, an issue that’s ostensibly nonpartisan and noncontroversial. A brain drain is what America will experience if we’re unable to attract and retain the best, smartest workers and entrepreneurs -- these people will move overseas and innovate and create businesses there, harming U.S. competitiveness in the global arena.

Studies show that foreign-born entrepreneurs are responsible for creating thousands of American jobs and generating billions of dollars in revenue. Michael Moritz, panelist and partner at Sequoia Capital, said that the number one problem facing the economy today is the need to bring to America these entrepreneurs who want to start companies -- but it’s not just getting them here, it’s keeping them here. Solutions on the table include removing per-country caps on skilled worker visas via H.R.3012, a bill that’s already working its way (slowly) through the legislative process, “stapling” a green card to graduate level students’ STEM degrees, and a startup visa.

In practice, in an election year, and with the Congress that we have, moving on anything is tricky. But, as President Obama noted in his State of the Union address, making some tweaks to skilled immigration has a much better chance of success than comprehensive immigration reform. However, there’s plenty in the pipeline for this issue. California 16th District Congresswoman Zoe Lofgren spoke today about her IDEA Act of 2011 as part of the answer to these problems. And we’re also following the Startup Act, a legislative agenda for startups that includes skilled immigration reform as part of a package of fixes to make it easier for entrepreneurs to start businesses that will create jobs and bolster the economy.

In the end, we’re hopeful the EIR process bears fruitful results and finds new pathways to success on the immigration front. If today’s event was any indication, they seem well on their way, and it’s time to step up pressure on Congress and the White House to act on these issues with innovative solutions.

Mapping the Groundswell

Today we’re putting up a page on our website to show some of our data from the January 18th internet protest that stalled internet-harming copyright legislation in its tracks.

It’s been a month since the internet community joined forces to protest against the Stop Online Piracy Act (SOPA) and the Protect IP Act (PIPA), the anti-piracy legislation that threatened open internet, and we’re finally starting to see some of the data from January 18th, the major “blackout” day of action against the bills.

We’re proud to have been one of the leaders on the anti-SOPA/PIPA movement -- our StopTheWall phone call campaign to link online activists directly to their local senator’s offices generated 15,000 calls through our site to local senators, so many calls, in fact, that there was a senate switchboard meltdown. But what’s really exciting to see is how our efforts were part of a much larger whole, proving that the our community is capable of being a formidable force when it comes to protecting the internet.

Our map tool breaks down by region the action that took place on January 18th. The data shown represents the phone calls made to local senators and the number or signatures on petitions. We think its pretty cool. Take a look at it here.

Hey. No SOPA. Remember?

We’ve got our eyes on this one: Form building startup Jotform.com, which hosts it’s domain on GoDaddy, was suspended two days ago by a U.S. government agency in the course of an investigation into content posted on Jotform’s site.

Jotform founder Aytekin Tank posted on their corporate blog defending Jotform and also directing users to move their forms to JotForm.net while the investigation is cleared up. Tank defended his site’s policing methods and results, saying, “This can happen to any site that allows public to post content. SOPA may not have passed, but what happened shows that it is already being practiced.” [emphasis added]

Tank also wrote an agitated post on Hacker News detailing his impatience at the U.S. Secret Service’s lethargy in responding to the case. He said; “I told them we are a web service with hundreds of thousands of users, so this is a matter of urgency, and we are ready to cooperate fully”.

We’re watching to see how this plays out. While there’s not a lot of information at present, it seems as if GoDaddy or the government or both may be dangerously close to the kinds of enforcement rules that were rejected with the shelving of SOPA and PIPA.

Public Parks for the Airwaves

H.R.3630 just cleared House-Senate negotiations, and a consensus has been reached regarding the spectrum related provisions of the jobs bill. The bill contains provisions to take away the FCC’s ability to set eligibility rules for the auctions, and to re-allocate unused TV frequencies -- these so-called “white spaces” -- as unlicensed spectrum. The deal that’s been made retains some of the FCC’s ability to preserve unlicensed spectrum, although not as much as we might have hoped.

All of this legislative language revolves around spectrum auctions, which are part of H.R.3630 in order to offset the cost of the extension of unemployment benefits. Spectrum auctions also have the keen attention of telecom companies and of tech companies, both of which are fearing the effects of a looming “spectrum crunch”. The white spaces between licensed TV frequencies are considered especially valuable “beachfront” spectrum, because of their ability to penetrate buildings, carry data traffic, and extend to rural areas. They are hotly contested; telecom companies want them for their mobile broadband services, but supporters of innovation want them to remain unlicensed so that new technologies can be developed over them as has been done in the past with services like WiFi and Bluetooth.

Let’s break this down.

The problem is, we have a limited amount of airwaves through which to conduct many different and competing services. Mobile broadband operators need to have spectrum licenses to use with an ever-growing demand for data use associated with smartphones -- Apple’s Siri alone causes the iPhone 4S to require unprecedented amounts of data , even compared to other data intensive smartphones. And consumer demand for mobile broadband services isn’t likely to wane -- according to AT&T, mobile data use on their network has risen by 5,000 percent in the last few years . Then there are  more traditional uses of spectrum, like cable TV networks, radio, text messaging, and cell phone lines. Then on top of that, there’s unlicensed spectrum -- the “public” areas of our airwaves where innovations like  Wi-Fi, Bluetooth, and baby monitors operate. The unused TV frequencies, or white spaces, come under this unlicensed spectrum umbrella.

It might not come as a surprise that AT&T is for provisions that would take away the FCC’s ability to set limits on who can participate in spectrum auctions, at least on the surface. They are one of the largest carriers and stand to lose the most if they are blocked out or limited in the auctions. Smaller mobile carriers, including Sprint and T-Mobile, sent a letter to Congress voicing their opposition to the provision, which they said would limit the FCC’s ability to promote competition. AT&T immediately hit back with a statement saying the smaller carriers want the FCC to “stack the deck in its favor” and that the auction should be “fair and open”. Several commentators have noted that AT&T’s vehemence on the issue is slightly puzzling, given they have managed to do pretty well under the FCC’s rules so far.

Far more pressing to us, though, is what happens to those innovation-friendly white space frequencies. The unused television frequencies are more than just empty white spaces. They are the public parks of spectrum. What happens in these “public parks” is vital to innovation and long term economic growth -- not to mention that everyone benefits from these spaces, including companies like AT&T that regularly use unlicensed spectrum to ease the burden on their own spectrum.

A group of 42 members of Congress, led by Rep. Anna Eshoo (D-CA) and Rep. Darrell Issa (R-CA), drafted and sent a l etter urging the preservation of unlicensed spectrum , arguing that “ exploring the use of beachfront spectrum, specifically in the television band, is vital given its ability to penetrate buildings, enhance rural coverage, and carry more data traffic than traditional Wi-Fi”.  The letter also noted that in the band best suited for mobile broadband, there is currently 5 times more licensed than unlicensed spectrum. Senator Jerry Moran (R-KS), a major proponent for innovation policy and who along with Sen. Mark Warner (D-VA) co-authored the Startup Act , signed the letter and reiterated the sentiment at a Wireless Innovation Alliance and White Space Alliance event , saying “ America would miss an incredible opportunity to enable innovation on unlicensed bands.”

Negotiations, then, have until now been stalled by a lot of competing interests.  It looks as if Congress is opting for a middle of the road approach that hopes to satisfy all sides of the debate.  We’ll be watching to see what the the actual allocations of unlicensed spectrum will be and how this plays out for the innovation agenda.

Who Really Engaged in Misinformation?

As a follow up to yesterday's link to Mike Masnick's rebuttal to the RIAA, Ernesto Falcon at Public Knowledge talks through the content industry's systematic campaign on misinformation around large swaths of SOPA and PIPA.

Read more at Public Knowledge

The App Economy

When Apple opened the iPhone to third party development, it opened a “Pandora’s” box of opportunities to capitalize on (and justify the price tag on) the groundbreaking mobile device. Adding services to this new generation of mobile phones, and later tablets, has turned out to be a fertile ground -- unearthing a sector of the tech industry that, according to a new study released yesterday by Technet, is responsible for just under half a million jobs. Not too shabby.

In his State of the Union address, President Obama vowed to incentivize bringing manufacturing jobs back to the U.S., and halt the unfettered loss of American jobs caused by outsourcing American jobs to offshore operations. And there has been plenty of furor in the media about conditions in Apple’s manufacturing factories in China.

As it turns out, regardless of any changes that need to be made as far as outsourcing and manufacturing, the US economy is seeing a tangible boost from the newly designated “App Economy”. The Technet study found that the total number of jobs related to the creation and distribution of apps since the 2007 release of Apple’s iPhone is close to 500,000. That includes a conservative estimate of around 155,000 tech jobs in app companies, and the same again for non-tech jobs in these companies -- sales, marketing, HR. The study also cites an estimate that the App economy generated almost $20 billion in revenue last year.

While these apps aren’t always backed by venture dollars and growing companies, like Routesy for example, a majority of them have found a way to create an entirely new sector of the economy - and one that is growing at a significant rate. And while many of these newly created jobs are in the “traditional” innovation areas like San Francisco and San Jose areas, followed by New York and Seattle, other areas like Atlanta, Dallas and Philadelphia, not traditionally thought of as leading technology areas are experiencing significant growth, with even more on the horizon.

With growth in mobile devices expanding and the technological platforms getting more and more robust with each product cycle, the boundaries for the app economy are limitless, and, as the Technet study confirms, we are hopefully only seeing the beginning of the building of a new economy.