Startup News Digest: 1/22/2015

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

Safe Harbor Agreement Nears Deadline. With a January 31st deadline looming, there is more pressure than ever for the U.S. and EU to wrap up negotiations around a “Safe Harbor 2.0” agreement. In a letter sent to U.S. and EU leaders last Friday, industry stakeholders emphasized that “the consequences could be enormous for the thousands of businesses and millions of users impacted” if a deal is not reached. But another setback came this week when the Senate Judiciary Committee postponed consideration of the Judicial Redress Act. The bill, which would extend rights to judicial redress to citizens of the EU and other designated countries, is seen as essential to advancing an updated safe harbor agreement. This delay makes it even less likely that a deal will be reached in time, the ramifications of which could disproportionately impact startups.

Another Proposal to Weaken Encryption. Another week, another misguided state bill seeking to weaken encryption. The legislation comes from a California Assemblymember whose proposal would prohibit the sale of smartphones in the state with unbreakable encryption. A similar New York bill requiring a “backdoor” for encrypted technologies was covered in last week's digest. In an opinion piece, Christian Dawson of the i2Coalition does a good job breaking down why policies like these would stifle the Internet economy. He writes, “If the U.S. government were to institutionalize backdoors, it would be a heavy burden to businesses, and an operational lift that would likely force a large number of small companies to shut their doors.” We couldn’t agree more.

Verizon Joins the Zero Rating Crowd. Tuesday morning, Verizon announced a new sponsored data program, FreeBee Data, renewing debate around “zero rating” programs and whether they violate net neutrality principles. Under the FreeBee program, content providers have the option to pay Verizon a fee to exempt their content from customers’ monthly data caps. Verizon is the third wireless provider to offer a cap-exempt data program—AT&T has been running a similar sponsored data program since 2014 and T-Mobile has its own video-specific service, BingeOn (which has come under intense fire in recent weeks). The FCC’s Open Internet rules don’t explicitly outlaw “zero rating” programs, but the agency reviews them on a case-by-case basis whether the service harms consumers or businesses. They recently requested meetings with both AT&T and T-Mobile on their programs, and have said that they were notified by Verizon about FreeBee. We’re tracking.

A Grim Outlook for Startup Financing? Recent turbulence in the global stock market may have an impact on 2016 startup financing, the Washington Post reported this week. Volatility in the public markets has many investors considering whether some growing tech startups have been overvalued, a concern that's "likely to trigger a wider pause, denying funds for the innovators that disrupt industries and create new markets." Not good. And while 2015 was a banner year for VC investment, with $72.3 billion going into venture-backed companies in the U.S., (the highest since the dot-com boom), activity slowed by the fourth quarter, suggesting changing investor sentiment. Further, tech IPOs were significantly down in 2015 as companies are treading cautiously into the public markets. 2016 may prove to be an especially important year for policy that promotes greater capital access.

VC Sets New Diversity Standards. Kapor Capital, a longtime leader in its commitment to diversity in the tech industry, announced a new set of standards for its portfolio companies this week. TechCrunch calls it a “a four-part roadmap for startups to foster diverse and inclusive cultures early on.” This commitment will soon become one of the terms in all Kapor’s future investment agreements. Portfolio companies will be required to establish diversity and inclusion goals, invest in tools and resources that assist in mitigating bias, organize volunteer opportunities for employees, and participate in Kapor’s diversity and inclusion workshops. Way to put their money where their mouth is!

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.

PRESS RELEASE: Evan Engstrom to become new Acting Executive Director

FOR IMMEDIATE RELEASE

January 14, 2016

Contact:

Rob Haralson for Engine Advocacy

(202) 251-3322, rharalson@franklinsquaregroup.com

Engine Advocacy Announces New Leadership

Evan Engstrom, Policy Director, to take on new role as Acting Executive Director

SAN FRANCISCO - January 14, 2016 - The Board of Directors of Engine, the policy advocacy group and research foundation focused on tech entrepreneurship, today announced that it has appointed Evan Engstrom as the organization’s new Acting Executive Director. Evan has served as Engine’s Policy Director since 2014. Julie Samuels, who is stepping down as the organization’s Executive Director, will remain as President of Engine’s Board of Directors and will be closely involved in the organization’s strategy and operation.

“Not only has Evan played a pivotal role in shaping Engine’s policies, he has also worked diligently to help grow the organization’s presence and has consistently demonstrated the leadership qualities necessary to lead Engine as the team continues to champion issues important to startups,” said board member Marvin Ammori. “Engine plays a critical role representing startups in policy debates, and we are excited to see the continued growth of the organization with Evan at the helm.”

Prior to joining Engine, Evan was an attorney at Farella Braun + Martel in San Francisco, focusing on copyright and other intellectual property litigation matters. At Farella, Evan litigated several high-profile Digital Millennium Copyright Act cases, defending websites and ISPs against claims for secondary copyright liability.

He is a graduate of Harvard Law School and the University of Wisconsin-Madison.

“Since its inception, Engine Advocacy has played an important role in shaping the discussions around key policy issues affecting the startup community,” said Engstrom. “2016 will undoubtedly bring a continued focus on issues surrounding patent reform, copyright, taxes, data localization, privacy and encryption, and newer technologies such as drones, driverless cars and platforms that are advancing the sharing economy. Along with the entire Engine team, I look forward to engaging on these and other important issues to ensure this vibrant community continues to have a voice in Washington and beyond.”

###

About Engine Advocacy

Engine is a technology policy, research, and advocacy organization that bridges the gap between policymakers and startups, working with government and a community of high-technology, growth-oriented startups across the nation to support the development of entrepreneurship. Engine creates an environment where technological innovation and entrepreneurship thrive by providing knowledge about the startup economy and constructing smarter public policy. To that end, Engine conducts research, organizes events, and spearheads campaigns to educate elected officials, the entrepreneur community, and the general public on issues vital to fostering technological innovation. To learn more, visit http://engine.is.

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.

Looking Forward (and Backward) to the 2016 Presidential Election

This post is one in a series of reports on significant issues for startups in 2015. In the past year, the startup community's voice helped drive notable debates in tech and entrepreneurship policy, but many of the tech world's policy goals in 2015, such as immigration and patent reform, remain unfulfilled. Check back for more year-end updates and continue to watch this space in 2016 as we follow policy issues affecting the startup community.

As 2015 comes to a close and we look forward to 2016, it is nearly impossible to ignore the presidential contest and its impact (or lack thereof!) on technology and entrepreneurship policy. As the party primaries rage on, notably missing has been any real debate about many of the issues that are most important to the startup community, such as access to capital, net neutrality, patent reform, and access to talent.

A few things are at play here: First, most of these issues are largely bipartisan. On the one hand, this is good news, since we’re more likely to see something get done. On the other, the polarizing nature of primaries—when candidates play to their bases—disincentivizes candidates from addressing anything that could be seen as centrist. Take, for instance, Sen. Marco Rubio’s 2013 efforts to strike a bipartisan deal on immigration, for which his Republican opponents now take him to task.

Second, with at least one notable exception (crypto and cybersecurity, more on that below), the issues startups care the most about frankly aren’t proving to be all that popular with campaigns. This is incredibly short-sighted. As economic growth and opportunity are central issues to every campaign, candidates should recognize startups as significant contributors. Startups are responsible for all net new job growth in the United States. They create opportunity and help the continued economic recovery in cities all over the country.

That’s not to mention all of the amazing technology they create, which is increasingly making its way into crucial and highly-regulated sectors such as health, transit, and education. How our federal government adapts to and regulates new technologies will greatly impact the future and the pace of innovation.

Our political leaders should support this community, which is why we’ve been disappointed to see so little attention paid to startup issues this political season. Troublingly, the only tech conversation receiving any significant airtime in the campaign—cybersecurity—has reflected a serious misunderstanding of the underlying technological issues and a disregard for the impact that ill-conceived cybersecurity policies would have on the startup economy. In the wake of numerous terrorist attacks, it’s no surprise that candidates are looking for any tool available to improve national security. But proposals to curb encryption technologies and increase surveillance programs only serve to make American companies and users more vulnerable to cyberattacks—there is simply no such thing as a “government-only” encryption backdoor—with no likely associated safety benefit. Tech companies and advocates have tried time and again to explain why such policies are technologically unworkable, but politicians do not appear to be listening. Obviously, this should be troubling to the startup sector. If policymakers are unwilling or unable to understand technology and tech issues, it’s unlikely that they’ll be able to craft policy that supports innovation.

It’s not just politicians, of course. Our community needs to make its voice heard, particularly as the primaries wrap up and we get down to the brass tacks of a presidential election. When that time comes, it will be up to us as much as to them to ensure that tech issues get their fair share of debate. We hope you’ll join us in making that happen!

2015 Year in Review: Privacy and Security

This post is one in a series of reports on significant issues for startups in 2015. In the past year, the startup community’s voice helped drive notable debates in tech and entrepreneurship policy, but many of the tech world’s policy goals in 2015, such as immigration and patent reform, remain unfulfilled. Check back for more year-end updates and continue to watch this space in 2016 as we follow policy issues affecting the startup community. 

by Emma Peck and Evan Engstrom

This year saw an alarming number of high-profile data breaches—as of mid-December, there had been over 750 breaches exposing nearly 178 million records, surpassing 2014’s pace. Not surprisingly, policymakers were compelled to turn their attention to data security and privacy issues, putting forth a range of proposals around privacy, encryption, surveillance, and data security. These proposals were met by the startup community with both praise and disapproval, but one clear message permeated the debates around all of these issues: too often, offered policy solutions do not take into account the needs and realities of the quickly evolving startup ecosystem. Outdated laws are applied to new technologies, and increasingly, new proposals show a clear lack of understanding of the technologies they will impact.

ECPA Reform

A prime example of a law that is completely ill-fitted for today’s technological realities is the Electronic Communications and Privacy Act (ECPA). ECPA is the privacy law that governs our interactions with the Internet. But the law was passed in 1986 (before most people even had computers in their homes), and it allows law enforcement to access electronic communications that are older than 6 months without a warrant on the grounds that such communications are “abandoned.” These rules do not conform to how people use and understand the Internet, and providing such lax privacy protections for electronic communications erodes consumer confidence in the safety and security of online services. Thankfully, a coalition of industry and civil rights organizations—including Engine—helped persuade California to correct this problem at the state level. In October, California passed reforms to ECPA requiring law enforcement to obtain a warrant before accessing a wide variety of digital information. A bill to reform ECPA at the federal level also resurfaced this year, garnering support from over 300 cosponsors in the House, which made it one of the most popular bills in Congress. There are still a few federal agencies that oppose reform, but a provision in the recently passed omnibus served as a rebuke to the remaining hold-outs. ECPA reform will likely be one of the first topics considered by the House Judiciary Committee in 2016, and we are tracking.

Encryption

This year, 2016 presidential candidates and current policymakers also put forth proposals aimed at combating terrorist threats to our nation—from “closing that Internet up,” which has been broadly viewed as preposterous, to creating backdoors for encrypted technologies, which unfortunately has been met with acceptance in some circles that ought to know better. The debate around encryption is one of the best examples of the problems that arise when lawmakers don’t understand the technologies at issue in the policies they are proposing. It is well accepted by cryptographic experts that creating a backdoor (or “golden key”) for encrypted technologies is not technically feasible without undermining the security of the system as a whole. And in addition to threatening constitutional rights, it is unlikely that creating a backdoor would even be effective in keeping bad actors from using unbreakable encryption. Yet this “solution” has been central to a number of policy proposals, highlighting a lack of understanding from lawmakers on both sides of the aisle.

Safe Harbor

In October, the tech world was left in a state of confusion after the European Court of Justice (ECJ) invalidated the safe harbor agreement that allows for the legal transfer of data between the U.S. and EU. In short, the ECJ ruled that U.S. laws allowing the government to broadly and secretly collect consumer data violated EU privacy rules and therefore, the safe harbor rule was incompatible with EU law. As such, companies that had previously relied on the safe harbor as the legal basis for importing EU customer data into the U.S. had to find other ways to legally import such data. Many commentators downplayed the significance of the ruling, noting that companies could find other legal pathways for importing EU data via contractual agreements or pre-approved internal data protection mechanisms. But, while such protocols may be feasible for large multinationals, startups with EU customers but without the resources necessary to negotiate alternative arrangements were left in legal limbo. Though EU and U.S. policymakers are working on developing another safe harbor arrangement, the recent push in the U.S. to further weaken privacy protections through misguided encryption policies could end up ensuring that any new safe harbor rule would also fall short of EU privacy standards. More broadly, the court ruling helped crystalize the nonsensical nature of enforcing territorial data restrictions in a globally interconnected digital world and highlighted the impact that U.S. surveillance practices have on the ability of American startups to thrive in an increasingly global world, where many countries have concerns about the privacy of their citizens’ data.

Data Security

Spurred on by the many data breaches in 2015, members of Congress spent considerable time crafting legislation regarding how companies should handle security breaches. A number of the proposals require notification within a set amount of time following discovery of a breach. While well-intentioned, security professionals agree that publicly announcing a breach too early actually decreases security by allowing for bad actors to take advantage of vulnerabilities that have not yet been patched. It’s true that a uniform federal standard would be preferable to the existing 47 state laws governing breach notification insofar as compliance with a single standard is easier for cash-strapped startups than having to comply with 47 different regimes. But the bills introduced this year are deficient in a variety of ways that highlight the alarming lack of technological expertise on Capitol Hill.

Additionally, as a result of a court decision earlier this year, the Federal Trade Commission (FTC) now has explicit authority to police whether companies’ data security practices are “reasonable”. However, determining which practices are reasonable and which are not is a difficult task—even security experts disagree over which protections companies should have in place. The FTC has tried to bridge this gap in technological understanding through their “Start with Security” initiative. And Engine hosted an event in October to help startups navigate data security policy. But it is still clear that lawmakers do not understand data security as a technical matter, and it is the role of the startup community to try to educate policymakers on the ways in which proposed policies can dictate practices, for better or worse.

Looking Forward

Privacy and security were two of the most talked about issues in 2015 and it’s unlikely that they’ll go away in 2016. They have already featured heavily in the Presidential debates, and as more of our daily life migrates to the online world, cybersecurity threats will only continue to grow. Policymakers know they must do something to address these threats, but doing something is not necessarily better than doing nothing if proposed policies don’t reflect the technological realities of today. Before the tech sector can convince Congress to pass bills that support the work we are doing, we have an obligation to instruct policymakers on how their policies will impact and interface with technologies in practice. Engaging at this level will pay dividends down the road.

2015 Year in Review: Regulating the New Economy

This post is one in a series of reports on significant issues for startups in 2015. In the past year, the startup community’s voice helped drive notable debates in tech and entrepreneurship policy, but many of the tech world’s policy goals in 2015, such as immigration and patent reform, remain unfulfilled. Check back for more year-end updates and continue to watch this space in 2016 as we follow policy issues affecting the startup community.

by Anna Duning and Evan Engstrom

The ever-increasing pace of technological development and expanding reach of innovative enterprises into well-regulated industries has put considerable strain on the nation’s policymaking apparatus. As new technologies (such as recreational drones) become more popular and new platforms integrate everyday activities (such as transit) with technology, policymakers are faced with difficulties in crafting forward-thinking policies or adapting existing regimes to new technologies. In 2015, we saw this phenomena play out in a variety of ways all across the country at the municipal, state, and federal levels.

New Devices, New Rules

In 2015, the drone market grew exponentially, with more than 400,000 drones sold. The increasing presence of unmanned aircrafts—and the corresponding rise in reports of rogue drones posing safety hazards to commercial aircrafts and stoking privacy concerns—prompted the Feds to introduce new regulations for recreational drones this year. The Federal Aviation Administration, along with the Transportation Security Administration, ultimately came up with a drone registry for hobbyists, requiring recreational pilots enter their devices into a new national database. Commercial drones from the likes of Google, Amazon, and even Wal-Mart are also expected to take to the skies in the new year. These companies have all been part of a lobbying effort to keep new regulations limited and reasonable.

As the age of widely-available autonomous vehicles nears (Tesla says within two years), state lawmakers are grappling with how to establish the appropriate safety and regulatory standards for what will surely be one of the most disruptive technologies deployed in recent memory. Cybersecurity, accident liability, and basic road rules are all pressing concerns. Several states have already approved the testing of autonomous vehicles with varying degrees of regulations. Most recently, California introduced proposed rules that would require a licensed driver to be present in the vehicle. This requirement could limit some of the more promising uses of these new vehicles (such as transportation for the young or disabled) and even threaten the vehicle’s safety, but the state will take comments before instituting the final standards. We’ll be monitoring closely as state governments continue craft new regulations. These new rules won’t just impact the big manufacturers, as autonomous vehicles could spawn an entirely new sector of startups creating software for these cars.

Blockchain Rising

Though Bitcoin and the blockchain technology that powers it are relatively old developments by tech standards (2009!), cryptographically-secure distributed ledger technologies came to the attention of the mainstream in a big way this year, drawing interest from large financial institutions and regulators alike. While this increased scrutiny may rankle some of Bitcoin’s techno-libertarian old guard, the relatively cautious approach policymakers have taken to regulating the Bitcoin sector is a promising sign for the future growth of cryptocurrencies and blockchain technologies.

As Federal regulators have been content to monitor the development of cryptocurrencies, state policymakers have taken more proactive steps to regulate the sector. New York enacted its BitLicense rules this summer, which obligate financial intermediaries that hold or control virtual currencies on behalf of New York residents to obtain a license and follow certain customer monitoring and reporting requirements. The rules were meant to apply to just those companies that handle funds on behalf of customers and not impact software developers and entrepreneurs that don’t actually control customer money, but since the Bitcoin system looks so radically different from traditional financial systems, the rules necessarily have created some confusion as to how they will apply in practice. Fortunately, New York regulators appear to be cognizant of the need to avoid overregulating this nascent industry and will hopefully work to rectify any overbroad regulatory issues that may arise. As other states begin to consider regulations like New York’s regime (California for one debated a similar Bitcoin license bill this year before it died in the legislature), the need for a more uniform Federal standard will quickly become a priority for the sector. With more and more money pouring into blockchain startups ($500 million in 2015 alone), digital currency regulation will likely become a more pressing issue in 2016 and beyond.

The New Sharing/Gig/On-Demand Economy

No one seems to have agreed upon the best term to describe the collection of technology startups building platforms that connect customers to workers, homeowners, and drivers. Call it the sharing economy, the gig economy, or the on-demand economy; regardless, this new technology is shaking up well-established industries and the regulatory frameworks in which they’ve long operated.

Startups including Uber, Lyft, TaskRabbit, Handy, and Instacart (to name just a few) are restructuring how a wide variety of services are provided, and with that, challenging the existing labor standards that by and large rely on two narrow designations—employee or independent contractor. Many of these companies now face a slew of lawsuits about that classification, including a class action against Uber in California. Just weeks ago, Seattle became the first city in the nation to allow on-demand drivers to unionize. This legislation, too, will likely be contested in courts. The outcomes of these cases could dramatically reshape the 1099 economy and will surely impact the startups who’ve built their companies around existing worker classification rules. We’ll be paying close attention as they’re debated into 2016 and beyond.

Beyond the labor market, many of these startups are providing new (and in many ways, better, faster, and more efficient) services within highly regulated industries. This year, ridesharing companies, came up against major challenges in cities throughout the world. The New York City Council proposed rules this summer that could have put a freeze on all for-hire vehicles. Another requirement—that ride-sharing apps pass government approval before making changes—was also floated, though ultimately struck down. Meanwhile, San Francisco voted on a ballot proposition to limit Airbnb rentals in the company’s home city, a measure that ultimately failed, but cost the company $8 million to fight.

Ultimately, the trend of startups beginning to compete in heavily-regulated sectors of the economy accelerated in 2015 faster than many had predicted, resulting in an all too common struggle to fit the square peg of new innovations into the round hole of existing regulations. Not surprisingly, given the slow pace at which our nation’s regulatory bodies operate, the many policy debates that came to the fore in 2015 are nowhere near resolution. Next year will almost certainly see these policy debates escalate, and it is imperative that the startup community engage in this policymaking to ensure that the incredible potential of new technologies isn’t stifled by ill-fitting regulations.

2015 Year in Review: Telecom

This post is one in a series of reports on significant issues for startups in 2015. In the past year, the startup community’s voice helped drive notable debates in tech and entrepreneurship policy, but many of the tech world’s policy goals in 2015, such as immigration and patent reform, remain unfulfilled. Check back for more year-end updates and continue to watch this space in 2016 as we follow policy issues affecting the startup community.

by Emma Peck and Evan Engstrom

The net neutrality debate that dominated the tech policy conversation in 2014 was once again the top telecom issue in 2015, peaking at the end of February with the Federal Communications Commission’s (FCC) passage of its new Open Internet Order, which contained the strongest non-discrimination rules ever put in place to protect the Internet economy in the U.S. The telecom excitement didn’t end there, as policymakers and courts dealt with a huge number of issues related to promoting telecom competition, limiting ISP discrimination, and building out the next generation of telecommunications services. In short, the momentum in 2014 carried over into 2015 in a big way, and looking ahead, 2016 is poised to be yet another landmark year in telecom policy.

In addition to the FCC’s net neutrality order, the startup community saw big wins with the termination of the Comcast-Time Warner Cable merger and the FCC’s decision to undo anti-competitive broadband laws in Tennessee and North Carolina. We weighed in on debates around next year’s incentive auction and continued to push for increased unlicensed spectrum allocation. Lastly, we articulated our hope to see legislation move next year that would open up more federal airwaves for commercial use.

Net Neutrality

After more than a year of campaigning, the tech community won one of its biggest policy victories ever with the FCC’s decision to reclassify broadband as a telecommunications service in order to pass the strongest net neutrality rules this country has ever seen. Net neutrality advocates had little time to rest, however, as the rules immediately came under fire in Congress and in the courts. Republicans used their control of both houses of Congress to push legislative tricks meant to undermine the FCC’s work, including riders to various unrelated appropriations bills that would have blocked the FCC from using any funding to enforce the new Open Internet Order. While the net neutrality community effectively neutralized those threats, a legal challenge to the net neutrality rules is still playing out in the courts. Filed by a consortium of ISPs immediately after the FCC’s February vote, the lawsuit argues that the FCC overstepped its statutory authority in reclassifying broadband under Title II and that—despite more than 4 million public comments—the FCC did not provide adequate notice of the regulatory changes it made. An appellate court heard oral arguments in the case in December and is expected to issue a ruling early next year. Whatever the outcome, the Supreme Court is likely to weigh in, ensuring that the net neutrality debate will continue in 2016 and beyond.

Municipal Broadband

In another high-profile legal battle, the FCC is fighting to uphold its authority to preempt state laws that inhibit municipal broadband build-out. At the same February meeting where the historic Open Internet vote took place, the FCC acted to improve broadband access and competition by undoing anti-competitive broadband laws in Tennessee and North Carolina that prevented local communities from providing Internet access for their citizens. But those states have pushed back against the FCC’s decision in a lawsuit that will continue to play out into 2016. The outcome may impact the FCC’s broader authority to encourage broadband deployment, and we are tracking.

Telecom Mergers

The startup community won another victory in April when Comcast’s plan to merge with Time Warner Cable (TWC) collapsed under regulatory pressure. The proposed merger would have given Comcast monopoly control over Internet access for a huge swath of the country, effectively removing any incentives to increase speeds, lower costs, or expand coverage. The same enthusiasm that drove the effort to pass strong net neutrality rules helped convince regulators at the FCC and in the states to take a hard look at whether allowing this type of consolidation in the market for Internet access would end up doing irreversible harm to the nation’s high-speed broadband market. Recognizing that promoting competition between ISPs is the only way to help put the U.S. back on par with international peers in terms of broadband affordability and quality, the FCC hinted that it would block the merger, prompting Comcast to walk away from the deal. While the merger’s demise meant that ISP competition didn’t deteriorate further, there is still a long way to go before there is adequate competition in broadband markets.

Spectrum

Incentive Auction

Broadcasters, potential bidders, and regulators spent 2015 gearing up for next year’s spectrum incentive auction. With enormous sums of money at stake (an auction of less valuable spectrum brought in more than $40 billion in 2014), stakeholders have been aggressively lobbying for favorable auction rules over the past few years, and this spring saw a particularly heated debate around the size of the auction’s spectrum reserve. As competition is so important for startup growth, the startup community weighed in on the importance of establishing auction rules that promote competition. While we didn’t win the fight for a larger reserve, next year’s auction still has the potential to re-shape competition in the mobile broadband market. We’ll be watching when March rolls around.

Unlicensed Spectrum

Licensed frequencies weren’t the only airwaves getting attention this year. 2015 saw an explosion in the “Internet of Things” and continued growth in the use of Wi-Fi, attracting the attention of policymakers and underscoring the importance of access to unlicensed spectrum. In November, Engine supported legislation introduced by Sen. Schatz that would ensure that unlicensed spectrum is central to any future spectrum strategy. We hope to see that bill or something similar move next year, possibly with a larger spectrum package (more on that below).

Federal Spectrum

The AWS-3 spectrum auction ended in January, netting almost $45 billion and demonstrating that there is still a critical need (and willingness to pay high dollar) for spectrum. In an effort to free up more of this valuable resource, members in both the House and Senate introduced bills that would incentivize the federal government to give up its inefficiently used spectrum. While neither bill was able to move before year’s end, there is hope that a larger spectrum package that includes these provisions, as well as a number of broadband deployment provisions, will be taken up sometime in the new year.

2015 Year in Review: Capital Access

This post is one in a series of reports on significant issues for startups in 2015. In the past year, the startup community’s voice helped drive notable debates in tech and entrepreneurship policy, but many of the tech world’s policy goals in 2015, such as immigration and patent reform, remain unfulfilled. Check back for more year-end updates and continue to watch this space in 2016 as we follow policy issues affecting the startup community.

by Anna Duning and Evan Engstrom

2015 will be remembered as the year of investment crowdfunding. In October, the SEC released the long-awaited rules that finally allow everyday investors to crowdfund startups in exchange for an ownership stake in the business. The Title III rules were certainly the most anticipated development in of the year in capital access policy, but the SEC also unveiled other alternative fundraising mechanisms that may end up eclipsing investment crowdfunding in impact, at least in the short term. Congress joined the mix as well, working on a variety of bills to help promote capital formation. However, as with the SEC’s efforts, the efficacy of these programs remains to be seen. Ultimately, 2015 was a year of new developments and renewed optimism for capital access policy.

Investment Crowdfunding is Finally Here

After Congress passed the JOBS Act in 2012, the SEC was tasked with crafting rules to fill in the details of Congress’s proposals, including Title III of the JOBS Act, which legalized investment crowdfunding for non-accredited investors. In the intervening years, the SEC passed rules supporting other aspects of the JOBS Act, but it dragged its heels in implementing investment crowdfunding under Title III. Having missed several prior deadlines, the SEC finally issued rules for non-accredited investment crowdfunding at the end of October. The rules themselves improved upon the SEC’s original proposal from 2013 in some key ways, but, as we discussed at length in a white paper on the then-proposed crowdfunding rules earlier this year, the upfront disclosure obligations are especially problematic. Unless and until startups can raise small amounts of capital without having to incur significant costs preparing disclosures, that are largely useless to investors, it’s unlikely that many startups will turn to investment crowdfunding as a primary fundraising tool. We’ll be watching.

The Mini IPO

Several months before the SEC released the long-awaited final Title III crowdfunding rules, the agency completed another set of JOBS Act rulemaking, which garnered slightly less attention. With Title IV rulemaking complete, growing private companies now have another funding mechanism, Regulation A+, through which they can raise up to $50 million without being subject to some of the onerous reporting requirements required of publicly traded companies. Industry experts have called it a sort of “mini IPO.” Regulation A+ also allows for a limited subset of non-accredited investors to participate in the investment. In its short lifespan, this new exemption has seen limited activity: as of October, only 34 companies had pursued or were in the process of pursuing a Reg A+ raise. This slow start may be attributable challenges from state securities regulators about exactly whom should be eligible to take part in these new investments.

States Take Up Crowdfunding, Too

While investment crowdfunding rules languished in the rulemaking process until the very end of 2015, states took it upon themselves to craft new capital formation tools for startups. Throughout the year, several states passed crowdfunding legislation, authorizing local businesses to raise equity from local shareholders within the state. New Jersey was the most recent state to legalize intrastate crowdfunding in November. The SEC also gave intrastate crowdfunding a boost of confidence in November when it proposed a new rule that, among other improvements, would allow companies to pursue intrastate crowdfunding even if incorporated elsewhere. Ultimately, intrastate crowdfunding may not be an appealing fundraising option for high growth technology startups whose services and products may reach far beyond a state’s borders, yet we’re pleased to see state legislators recognize the importance of capital formation for new firms.

Congressional Support for Startups

Throughout the year, members of Congress also attempted to bolster capital formation through various measures, though on a scale far more modest than 2012’s JOBS Act. Recognizing that startups and other tech companies are staying private for longer, policymakers have sought ways to provide much needed liquidity for employees. One such bill, the RAISE Act—which was passed unanimously in the House and ultimately included in the massive highways bill—streamlined the process of privately selling unlisted shares. Other capital access-related legislation such as a bill that would create exchanges for private venture securities (the “Main Street Growth Act”), and one that would loosen restrictions on startups “generally soliciting” investments (the “Helping Angels Lead our Startups” or “HALOS” Act”) received some air time in Congress, but remain in legislative limbo.

Looking Ahead to 2016

In 2016, it seems likely that policymakers will direct efforts in capital access policy towards a few key areas. Improving the structure of Title III investment crowdfunding should remain a priority, as many critics have identified issues with the rules. If Congress is serious about democratizing startup financing, they’ll need to diligently track the growth of the crowdfunding sector and promptly respond to problems that spring up along the way. Similarly, despite the passage of the RAISE Act, liquidity for private shares remains a concern as IPOs decrease. While many tech companies don’t like the idea of liquid markets for their shares, if startup employees continue to find it difficult to receive value for their stock options, startups will find it harder and harder to attract top talent, as employees will be loathe to leave larger firms if the compensation startups can offer is functionally useless.

Finally, as 2016 is likely to see a large scale debate on tax reform, Congress will inevitably consider tax policies meant to help drive startup activity. 2016 may not match 2015’s monumental capital access policy achievements, but startups should work to harness Congress’s enthusiasm for policies that promote startup growth to continue the positive momentum in the new year.

Year in Review: Patent Reform

This post is one in a series of reports on significant issues for startups in 2015. In the past year, the startup community’s voice helped drive notable debates in tech and entrepreneurship policy, but many of the tech world’s policy goals in 2015, such as immigration and patent reform, remain unfulfilled. Check back for more year-end updates and continue to watch this space in 2016 as we follow policy issues affecting the startup community.

Despite real strides made in the courts, patent trolls continue to be a serious drain on the startup economy. The number of patent cases filed by trolls in the first half of 2015 outnumbered filings in previous years. Historically, the majority of troll cases were filed against small companies with revenues of less than $100 million.

Recap: Patent trolls take advantage of loopholes in the patent system to leverage bad patents and expensive litigation to force companies (especially small ones) into costly settlements. Settlements that could cost several hires, derail products, challenge customer trust, or, worse, harm the whole company.

Back in January, the House reintroduced the Innovation Act and the Senate followed suit with the PATENT Act, reflecting strong commitments from congressional leaders to pass a bill that would put a stop to this tax on startups. These bills are both comprehensive in nature, addressing the trolls’ favorite loopholes. Some of the key provisions address pleading requirements, discovery procedures, and fee-shifting standards.

The House bill also includes a provision to address venue abuse, one that specifically would keep cases out of the now-infamous Eastern District of Texas. The provision would limit patent infringement suits to districts where the patent inventor conducted research or a party operates a physical facility. This will hopefully disincentivize those who cherry-pick venues based on where they are most likely to win -  i.e., the Eastern District of Texas, where nearly half of patent cases in the US were filed in the first half of 2015. Note: Thus far, the Senate bill does not include a similar provision.

Though voted out of their respective Judiciary Committees in June, we’ve seen both bills stalled, waiting to be scheduled for a vote by the entire Congress. Why? As Engine’s Executive Director Julie Samuels explained: competing interests operating in a one-size-fits-all system. The patent system, as it stands now, works for incumbents, like the pharmaceutical and manufacturing industries that have profited from it for decades. Unfortunately, this system does not work so well for technologies that rely on software, which represent an ever-increasing amount of economic activity. And not just from tech companies! Industries like retail, homebuilders, and realtors, for example, increasingly rely on software innovations to grow their business, only to find themselves facing a broken patent system, staring down the gun of a patent troll.

This year, we also saw non-comprehensive patent reform legislation introduced (again) that, while a good start, would not have gone nearly far enough to address the patent troll problem. And due to the lack of action from Congress, 2015 saw an increasing number of state legislators attempt to curb the patent troll problem. And there was also the evolution of the Pharmaceutical industry’s (PhRMA) own troll: Kyle Bass, the hedge fund manager who uses the Inter Partes Review (IPR) program at the Patent Office to challenge weak pharmaceutical patents and then short the stock of the company that owns the patent. In response, PhRMA has advocated for changes to the IPR process to limit Bass’ success. We hope these changes don’t happen; it’s important that we keep this program robust as an effective alternative to challenging bad patents without wasting the resources demanded in a courtroom.

Though patent reform was met with challenges in 2015, we remain confident that 2016 could bring about real and comprehensive legislation. Representative Goodlatte in the House and Senators Schumer, Cornyn, Grassley, and Leahy in the Senate remain committed to seeing legislation through. Coupled with court cases that help address low patent quality (like last year’s Alice v. CLS Bank decision, which has gone a long way to help get bad patents out of the system), the prospect for patent reform remains good. Engine will remain a firm supporter of comprehensive patent reform as we head into the new year.

Year in Review: Tech Talent and Diversity

This post is one in a series of reports on significant issues for startups in 2015. In the past year, the startup community's voice helped drive notable debates in tech and entrepreneurship policy, but many of the tech world's policy goals in 2015, such as immigration and patent reform, remain unfulfilled. Check back for more year-end updates and continue to watch this space in 2016 as we follow policy issues affecting the startup community.

by Anna Duning and Ange Royall-Kahin

Lawmakers, industry leaders, and nonprofit groups alike contributed to important, and sometimes heated, conversations about America’s tech talent pool this year. The growing need for talented workers, the lack of diversity in the industry, and the vexed immigration system continue to pose challenges to both tech firms as well as policymakers.

Diversity

Additional tech companies joined some of the larger firms this year in releasing their diversity numbers. While the figures themselves didn’t inspire much confidence about industry diversity, we observed a growing recognition of the issue and commitment to creating a more inclusive tech industry. Engine participated in the Tech Inclusion Conference in San Francisco, where participants from across the country discussed challenges to improving the makeup of the tech community and solutions to making change. Several companies have also demonstrated good faith commitments to closing these gaps.

In Congress, Engine helped launch the Diversifying Tech Caucus in January to highlight the importance of diversity in the tech community and craft policy solutions to bring new people into this workforce. The bicameral, bipartisan Caucus, now with over 20 members, facilitated dialogues about startup efforts to diversify tech as well as the roles and obstacles veterans face in the industry. Another legislative group, the Congressional Black Caucus, also affirmed its commitment to diversifying the tech industry this year and launched Tech2020, an effort to increase the participation of African Americans in technology.

The White House and federal agencies also launched several initiatives this year to bolster and diversify the tech workforce:

• In March, the White House announced TechHire, a national program to get more Americans the training they need to enter the tech workforce. Through partnerships with universities, community colleges, apprenticeship programs, and non-traditional educational offerings such as coding bootcamps, TechHire has recruited over 40 communities to support their efforts.

• At the beginning of August, the White House hosted its first Demo Day under the theme of inclusive entrepreneurship, showcasing a diverse set of 50 entrepreneurs. The event also highlighted members of the tech community making concrete commitments to improving diversity.

• Later this year, the Department of Education launched a pilot program to evaluate the effectiveness of non-traditional education providers, such as coding bootcamps. While these new programs offer students valuable skills for well-paying, in-demand jobs, many are un-accredited and therefore disqualify students from using federal funding towards tuition. If successful, the outcomes of the Department’s pilot may help expand access to new learning models for vital technical skills.

Veterans

This year, we saw Washington take interest in how to connect veterans with resources that would aid them in transitioning into the tech industry. In July, Senators Moran and Tester introduced the Veterans Entrepreneurial Transition Act of 2015. The bill would allow veterans to apply their GI Bill benefits towards starting their own businesses. In August, the Department of Veterans Affairs (VA) launched a new pilot for accelerated learning programs (e.g. coding bootcamps with certain providers) - at no cost to participants. We look forward to seeing how the results shape the conversation around using GI Bill benefits towards coding bootcamps and alternative tech education.

Immigration

Immigration policy also plays a key role in supporting and growing technology companies and startups, too. Some of our country’s most successful technology firms were founded by immigrants and foreign talent is in high demand among U.S. tech companies, big and small. In 2015, the United States Citizen and Immigration Services (USCIS) received a record number of H-1B visa applications: 233,000 for the 85,000 spots. The H-1B program also came under fire this year for both favoring large companies and outsourcing firms (see Disney’s actions), as well as for abuse.

The H-1B program represents just one set of issues rattling our outdated immigration system, yet, none of these additional challenges saw real solutions from Congress this year. Speaker Paul Ryan made it clear that it’s unlikely any needed legislation will pass until a new president is elected. Nonetheless, a few incremental improvements (that didn’t require congressional approval) were pushed forward. USCIS began accepting work authorization applications so H-4 dependent spouses can work here, too. The Department of Homeland Security (DHS) is considering extending the OPT visa program for STEM students. And we soon expect DHS to announce guidelines for improved pathways for foreign entrepreneurs to acquire visas in order to start companies here.

Looking Ahead

While Speaker Ryan’s outlook gives the tech community little optimism for immigration reform in 2016, we hope high-skilled immigration policy will make its way into the presidential candidate agendas. It is likely that progress will be made to support veterans entering tech. The VET Act is gaining support and we expect that it will head to the Senate floor in the first half of the year. We also hope to see legislation introduced that would allow veterans to use their GI Bill benefits towards alternative tech education programs, such as coding bootcamps. On the industry side, we’re optimistic, too. The public pressure and attention on tech firms’ employee diversity that mounted throughout this year has now raised expectations. Companies are keenly aware they need to do better and made promises that we hope to see begin to come to fruition in 2016.

2015 in Tech and Startup Policy

In 2015, Engine celebrated several political victories for the tech community, traveled across the country to emerging startup ecosystems, and published new research on the challenging issues facing startups and policymakers alike.

We’re especially grateful for all the support of our community of entrepreneurs, VCs, and technology experts. They helped us win net neutrality, signed our letters to Congress, joined us on Capitol Hill, and shared their stories to demonstrate why entrepreneurs and the startups they build are such a valuable part of our economy and our nation.

Watch this space to read about all the issues we tackled this year.

Engine Highlights in 2015: Major Wins and Moments for Technology Startups and Entrepreneurs

Net Neutrality: The FCC announced its historic net neutrality decision to keep the Internet open and fair. Engine has since defended attempts to undermine net neutrality in the courts.

Capital Access: The SEC finalized investment crowdfunding and Reg A+. Engine published a paper on improving investment crowdfunding policy for startups and investors.

Patent Reform: Over 140 venture capitalists and 200 startups signed letters in support of patent reform. We brought several groups of startups to the Hill and released a book of troll stories. And this summer, the PATENT Act and the Innovation Act were passed out of Judiciary Committees in both the Senate and House.

Diversity in Tech: Engine launched Congress’ first and only caucus uniquely dedicated to expanding diversity in the tech industry. We also launched efforts to support #VetsWhoTech with a briefing on Capitol Hill, support for the VET Act, and released a series of stories about veterans in the tech sector.

Telecom: We worked with a coalition to successfully stop Comcast’s attempted merger with Time Warner.

Digital Privacy: The state of California passed one of the strongest electronic communication privacy laws in the nation.

Startup Cities: Engine visited emerging startup ecosystems around the country, stopping with the #RiseofRest tour in Richmond, Raleigh-Durham, Atlanta, New Orleans, Baltimore, Philly, Buffalo, and Manchester.

2016 Race: Engine hosted the first ever Iowa Presidential Tech Town Hall.

We hope you’ll join us in 2016 as we continue to fight for greater capital access, improved educational opportunities for tech workers and aspiring entrepreneurs, patent reform, and strong net neutrality protections.

Catch you next year!

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.

CISA Resurrected: Bad Policy, Broken Process

News yesterday that a dormant and much maligned cybersecurity bill—the Cyber Information Sharing Act—had not only resurfaced but was on a fast track towards becoming law by virtue of being appended to a large spending bill came as an unfortunate surprise for the tech sector, privacy advocates, and anyone who cares in transparent policymaking. In the last few weeks of 2015, all of Congress’s remaining legislative capacity was directed towards passing the bloated mish-mash of policies known as the “omnibus.” In theory, the omnibus is a “must-pass” spending bill (“must-pass” in the sense that signing it into law is necessary in order to fund the government) that combines a number of different appropriations bills into one, streamlining what could otherwise be a tedious effort to pass spending bills piece-by-piece. But, in what has become a commonplace practice in DC, this year’s omnibus crams in piles of unrelated legislation (more than 2,000 pages in all), effectively ensuring the passage of controversial bills that would likely have faltered if exposed to the normal legislative process, public debate, or a straightforward Presidential veto.

Ultimately, this means that groups and individuals without significant influence or lobbying power often find themselves pushed out of closed-door conversations about what unrelated bills get appended to the omnibus. While this closed process doesn’t always result in terrible legislation (the removal of anti-net neutrality riders to this year’s omnibus being a prime example of good policy emerging from the omnibus mess), when bad legislation does find its way into the omnibus, it’s almost impossible to get it out. It is through just this backwards process that the ill-fated Cyber Information Sharing Act (CISA) found its way into the omnibus and on a seemingly unstoppable course towards a Presidential signature.

CISA essentially creates a framework for companies to collect and share user data with government in a way that may circumvent basic privacy protections. While the bill is supposed to help government and industry cooperate to prevent cyber attacks like the high-profile hacks that targeted Sony, Target, and the federal Office of Personnel Management, 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. By moving CISA through the omnibus, these critics have been shut out of the recent negotiations. It’s no surprise then that the language that ultimately made it into the omnibus is worse in terms of privacy protections than other iterations of the bill.

For startups, CISA’s inclusion in the omnibus is bad for a few reasons. First, enacting significant legislation via amendment to unrelated must-pass bills limits the voice of small business in government. As this becomes more commonplace, startups who do not have the resources or relationships to participate in closed-door discussions are boxed out. Second, any bill that weakens privacy protections for user data threatens to undermine consumer confidence in Internet services. This, in turn, decreases the market for startups that provide such services. Finally, considering the European Court of Justice recently invalidated a crucial safe harbor by which US companies—startups included—were permitted to import EU consumer data precisely because of US laws that gave government access to user data without any real privacy protections, pushing a bill like CISA only threatens to make things harder for US companies operating overseas.  

As policymakers consider a variety of cybersecurity and privacy issues, it’s crucial that the startups and technologists that understand how key technologies actually work are a part of these conversations. Congress’s decision to move CISA through the omnibus spending bill is a move in the wrong direction for the startup sector’s participation in DC.

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.

Senate Bill Requiring Terrorist Activity Reporting a Flawed Approach

As terrorists increasingly exploit Internet and social media platforms to mobilize followers, disseminate propaganda, and coordinate attacks, working to diminish militants’ capacity to organize through social media is critical. And in the wake of the recent, horrific attacks in Paris and California, a renewed push to improve these efforts is understandable. But the Requiring Reporting of Online Terrorist Activity Act, introduced by Senator Dianne Feinstein earlier this week, is not the answer.

Every day, startups and tech companies voluntarily work with law enforcement to combat terrorist threats. FBI Director James Comey noted in a July Congressional hearing that even absent a legal requirement to do so, Internet and technology companies “are pretty good about telling us what they see.”

Sen. Feinstein’s bill would require tech companies to report “any terrorist activity” 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. Crucially, nowhere in the three page bill is “terrorist activity” adequately defined. The legislation is modeled after a law requiring the reporting of child pornography, but unlike child pornography (which is intrinsically unlawful, generally easy to detect, and never constitutionally protected speech), “terrorist activity” is vague and undefined. Under the bill, companies would have to independently determine what “terrorist activity” encompasses—a difficult task for startups without large legal teams or a deep understanding of this complex landscape. Startups are neither qualified nor equipped to comply with these onerous requirements.

Beyond its burdens, the bill’s incentive structure is illogical. Because of the overbroad definition of “terrorist activity,” there will be a strong incentive for companies to over-report poor quality information, lest they miss something for which they will later be held liable. This will create a needle-in-the-haystack conundrum, swamping law enforcement with useless information.

On the flip side, the bill could also discourage some companies from reporting anything at all. The bill’s sponsors emphasize that the bill would not require companies to monitor customers or undertake any additional steps to uncover terrorist activity. But if companies are only required to report activity when they see it, there is an incentive for some to simply turn a blind eye, arguing that if they did not have “actual knowledge” of the activity, they were not obligated to report it.

Simply put, Sen. Feinstein’s bill could potentially do more harm than good. It would chill innovation and create a compliance nightmare for startups. The bill’s flawed approach has already been debated, and an almost identical provision was removed from the Intelligence Authorization Act earlier this year due to similar concerns.

The startup community stands at the ready to partner with the government to combat those who want to harm our nation. But any policy solution should be balanced, well defined in scope, and grounded in evidence that it will truly make Americans safer.

2016 Candidates: What About Tech?

Since the 2016 presidential contenders declared their candidacies and more recently, garnered increasing attention from national media and the electorate, we’ve been listening closely to what they have to say about technology. From where we stand, there’s a lot at stake: the Labor Department expects over 1.3 million job openings in the industry by 2020, cybersecurity and privacy challenges continue to make headlines, and technology itself is only becoming more ubiquitous. That’s not to mention that many of the startups navigating these challenges are an invaluable part of the national economy: new firms are responsible for all net new job growth in the United States. Yet, aside from some vague musings about the gig economy, general statements about immigration reform, and outlandish ideas about the Internet, we haven’t heard much, at least much of substance.

As Engine’s Executive Director, Julie Samuels, explained in TechCrunch, candidates have thus far evaded questions on many of the issues that matter most to technology entrepreneurs and industry leaders, because “many of these tough issues split our traditional notions of the two-party system.” They also don’t have easy solutions.

In an effort to highlight some of these issues, Engine teamed up with the Technology Association of Iowa to host a forum on December 7 in Cedar Rapids. Iowa is not only the first state to hold primary elections, making it a popular destination for campaigns this time of the year, but it’s also home to a vibrant and growing technology and startup community. The tech industry is one of the fastest growing job sectors in the state and accounts for 8.8% of Iowa’s GDP.

The program started off with a panel discussion among Julie Samuels and local tech entrepreneurs to address why policy matters to this community in Iowa and all over the country. Eric Engelmann, founder of the Iowa Startup Accelerator, spoke about the importance of capital access to entrepreneurs building companies outside Silicon Valley. Helen Adeosun, CEO and co-founder of Care Academy, discussed the great need for industry diversity, and Bruce Lehrman, CEO of a Cedar Rapids-based data center company, noted the urgent challenge of finding technically trained workers.

We were later joined by 2016 candidates Gov. Martin O’Malley and Carly Fiorina who shared their own views on the talent shortage and access to capital, among other issues. 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; under his administration the state was rated number one for innovation and entrepreneurship by the U.S. Chamber of Commerce and expanded STEM education offerings in Maryland schools. When pushed on his specific policy prescriptions for supporting innovation and the country’s entrepreneurs, however, his answers were less direct.

Fiorina took a different approach in her address, strongly condemning the recent attacks in Paris and San Bernadino before turning to the role of technology “as a tool and a weapon” in national security and cybersecurity efforts. “Having led the world’s largest technology company, I know what it will take for America to lead in this realm,” she added. When Engelmann asked about whether she’d repeal the Affordable Care Act, which he said allowed entrepreneurs to start their own ventures, she affirmed she would, arguing the free market could better provide healthcare solutions. And in response to how she’d support more women entrepreneurs, Fiorina underscored the layers of the bureaucracy that slow down all new business owners.

This week’s forum offered us a glimpse on where at least two candidates stand on a handful of these important issues. As we look to 2016, we hope to hear a lot more.

EU Commission Seeks Input on Major Policy Regarding Online Intermediaries

Though the EU’s economy is the largest in the world in terms of GDP, its innovation economy has historically lagged behind the US and other international peers. Investment in EU startups has risen slowly but steadily in the past decade, but, the EU is home to only four of the top 20 cities for startups in Compass’s 2015 rankings. This is not just bad news for the EU economy, but also for US startups looking to expand overseas.

The sluggishness of the EU’s startup sector is due in no small part to the significant regulatory burdens involved in conducting business across member state boundaries. In fact, our research shows that how a country regulates its technology sector has an enormous impact on early stage investment in startups. In a study we published earlier this year, 88% of worldwide investors said they would be uncomfortable investing in digital content intermediaries in countries with an unfavorable or murky regulatory environment.

Fortunately, the EU is already well underway in devising a fix for its complicated regulatory hurdles in the form of the proposed EU “Digital Single Market”—essentially a uniform, trans-Europe market for digital goods and services. As part of its effort, the EU Commission recently issued a consultation asking for information and commentary regarding the value of online platforms and intermediaries in promoting innovation and economic growth. Since the Commission’s Digital Single Market strategy is still somewhat in flux, there is no guarantee that the new regulations it puts in place will work if the Commission doesn’t receive enough feedback explaining how crucial online platforms are in a well-functioning Internet economy, and how dangerous restrictive regulations would be to the viability of the EU’s burgeoning startup sector.

To maximize the potential of the Digital Single Market and foster startup growth throughout Europe, the EU Commission should ensure that its Digital Single Market strategy focuses on policies that support online platforms and intermediaries. Online platforms are critical to a healthy Internet economy by virtue of the core services they provide in connecting Internet users and facilitating the flow of information, but as the US tech sector shows, their real economic value lies in their ability to support interoperable startups that use larger intermediaries to build and promote their services. The Google Play and Apple App stores feature more than 1.8 and 1.5 million apps, respectively—a great many of which were created by the startups responsible for virtually all new net job growth. The economic value of this market is significant; by 2017, worldwide mobile app revenue alone is projected to exceed $77 billion. Assuming the EU doesn’t hamper the growth of this market by crafting regulations that impose undue costs and restrictions on online platforms, Europe stands to gain a significant portion of the app economy’s growth. Projections estimate that employment from the app market in Europe will increase from 1.8 million in 2013 to more than 4.8 million in 2018.

Of course, the app market represents just a small fraction of the value that online intermediaries provide in spurring startup activity. Social media platforms and search tools allow startups to easily and cheaply connect with customers and online payment platforms help lower startup costs by outsourcing payment systems; together, these intermediaries give entrepreneurs the ability to reach customers and turn their ideas into business realities. Online platforms are the hubs off of which countless startups have built their businesses, and the low cost of operating a business in this symbiotic, open model of innovation allows new entrepreneurs to build ventures with few resources. In this sense, allowing online platforms to operate effectively across the EU is critical to growing the EU’s startup ecosystem, not to mention to US companies looking to expand into international markets. As the EU collects information regarding the role online intermediaries play in Europe’s startup market, it’s important that the Commission hear from entrepreneurs and innovators on the ground who can speak to the value freely operating intermediaries provide to fledgling enterprises. The consultation closes December 30; interested parties can fill out the EU’s survey here.

UPDATE: The EU Commission is holding an event this Thursday in San Francisco at the Consulate General of the Netherlands (120 Kearny St.) with key stakeholders to discuss the implications of its online platform regulation strategy. This is an incredible opportunity to help shape the future of EU tech policy, so sign up while there’s still space.

Tech Meets Politics in Cedar Rapids

This afternoon, Engine, in partnership with the Technology Association of Iowa, is hosting the first ever Presidential Tech Town Hall. We’ve invited presidential candidates to address over 200 entrepreneurs, technology leaders, and caucus-goers in Cedar Rapids. Former HP CEO Carly Fiorina and Gov. Martin O’Malley will join us to share their platforms for supporting technology innovation and entrepreneurship.

Iowa is not only the first state to hold primary elections on February 1, but it’s also home to a vibrant technology and startup community. Major industry leaders including Google, Facebook, IBM, and Microsoft all have offices in Iowa. Norand Corp, now part of Intermec in Cedar Rapids, developed the core technology for Wi-Fi. Entrepreneurs in Des Moines, Iowa City, and Cedar Rapids are also building new startups every day.

What will the presidential contenders have to say to these tech-savvy and entrepreneurial-minded caucus-goers? You can join the conversation on Twitter at #IowaTech2016 and follow along by watching the livestream starting at 4pm CT at www.TheGazette.com.