Changing Immigration, One Step at a Time

I am a foreign-born entrepreneur. Originally from Peru, I studied engineering in Lima and was awarded a Fulbright scholarship to study in the US: first engineering at the University of Kansas and then business at the Wharton School at UPenn. I followed the immigration process - from J-1 student visa to OPT to H1B to F-1 to green card and finally in 2008 I was naturalized and became a U.S. citizen. I worked at Google as finance lead, head of investments, and manager, working on advertising products, energy, and data platforms. Now, I am co-founder of a seed stage venture fund and consultancy,

Hattery. Our team is growing by the day, and I have the extremely rewarding task of helping new startups grow and thrive.

Recently I was contacted by the U.S. Citizen and Immigration Services (USCIS)  and asked to be part of their Entrepreneur in Residence Program -- a really great initiative to get entrepreneurs, USCIS staff, and other experts together to collaborate on issues surrounding skilled immigration and entrepreneurship. The program embeds a small group of investors and entrepreneurs into the USCIS for 90 days, with clear objectives and deliverables. [Read our post about EIR here - Engine].

As an Entrepreneur in Residence, I’m invited to share my own knowledge based on my experience as a foreign-born entrepreneur in order to better pave the way for future innovation and economic growth spurred by immigrant entrepreneurship. This country’s success is largely based on the hard work and determination of immigrants throughout its history -- a legacy I’m very much proud to be part of. Startups are almost the sole driver of new job growth in this country, and foreign born entrepreneurs are responsible for starting some of the country’s most successful and job-creating companies, like Google. This is something that hits close to home for me -- since it was only after eleven years in the US that I was able to start my first company.

What I and the other participants of the program have found is that the current immigration system for skilled foreign-born workers does not encourage harnessing the talent and drive of foreign-born entrepreneurs to grow the U.S. economy.

Immigration is an issue at a legislative stand-still. While there are some measures on the agenda, the issue of undocumented workers easily gets conflated with skilled immigration and stalls proposed legislation. While it’s important to pursue legislative change, another avenue to explore is optimizing the current system: making it as user friendly as possible, and giving foreign-born skilled workers the tools and resources to use the visas that are currently available. This includes working with the USCIS to train adjudicators on how startups and tech companies have evolved (funding levels, SaaS, incubators and accelerators, etc.), in order to clarify and potentially innovate in the processes for foreign-born entrepreneurs starting companies across the US.

Another way to optimize the current system is to work with the USCIS to change the rules and policies on the current visas -- a measure that doesn’t require going through any legislative branch -- in order to help foreign born entrepreneurs to start their own companies. At the moment, workers here under an H1B visa can’t fulfill the requirements of the visa unless there is an employer-employee relationship, and that’s something we will be looking into in the program.

This country was built on immigration, and I am proud to be here continuing that tradition, with partners like Engine and others in the space who understand the importance of entrepreneurship to growing the US economy. And I’m looking forward to working with the USCIS to find new pathways to success for immigrant entrepreneurs. Read more about the program here.

Luis Arbulu is a Founder and Partner at Hattery, and an Entrepreneur in Residence with USCIS.

Rebuild America: Halt the Brain Drain

We’ve been looking into skilled immigration and its benefits to the American economy. See I through our eyes with this infographic.

Where We Are On Skilled Immigration

Despite being championed by President Obama in this year’s State of the Union and quickly seconded by all candidates in the Republican primary debates — we wrote about it here — proposed reforms of the immigration process for skilled individuals have been stalled in the lawmaking process. Skilled immigration is touted as a no-brainer: it has — supposed — bipartisan support, and there is plenty of evidence to show that bringing in skilled workers from other countries actually creates American jobs by complementing our existing skill-sets and creating more opportunities in fields like computer science and high-tech engineering. Growing demand for visas only highlights the inefficiency of the current system, with H1B applications in the first week of the visa round more than double last year’s. Sadly, for all the rousing rhetoric of bringing in the best and brightest to keep this country great and at the front of the pack, there has been limited advancement on the legislative front.

There are a couple of different avenues being discussed right now with regard to high skilled immigration:

1. Awarding a green card to advanced graduates in STEM fields (science, technology, engineering, mathematics) from US universities — straight from the mouths of Republican presidential hopefuls Newt Gingrich and Mitt Romney. STAPLE Act and Startup Act are the relevant bills for this one, and BRAIN Act follows the same principle but grants a five-year stay in the US to work in a STEM field instead of permanent residency.
2. Creating a new visa for foreign-born entrepreneurs who want to start businesses in the U.S. Startup Visa would allow foreign-born entrepreneurs who receive funding for their businesses and employ non-family members to be granted an employment based visa.
3. Eliminating the per-country cap on H1B visas; maintaining the same number of total visas but changing the distribution to solve the problem of excessively long wait times for high-skilled workers from countries like India and China. The Fairness for High Skilled Immigrants Act and AGREE Act deal with per-country caps.

So where are these bills? Let’s take a look at one of them — The Fairness for High Skilled Immigrants Act. Sponsored by Rep. Jason Chaffetz (R-UT), the bill received overwhelming bipartisan support and passed the House 389-15. Then Sen. Chuck Grassley (R-IA) effectively killed the bill in the Senate, citing a greater need for protections for American workers. Grassley is already critical of H1B, saying in 2009; “Employers need to be held accountable so that foreign workers are not flooding the market, depressing wages, and taking jobs from qualified Americans.”

Grassley’s statement is representative of the commonly cited misconceptions about skilled immigration, so let’s examine them in more detail. First off, with regard to the Chaffetz bill, changing the country caps wouldn’t increase the numbers of H1B visas, it would simply change the distribution process. So, under Grassley’s logic, the new legislation wouldn’t harm Americans any more than they are now. Furthermore, when the current mode of visa distribution was conceived, it was likely optimizing for a diversity of immigrants rather than for a specific skill set need. Altering this model just changes the optimization for our current needs — more skilled high-tech workers from STEM fields.

Then there’s STEM visas, which, according to Grassley, carry with them the danger of flooding the employment market and depressing wages. Actually, it’s pretty unlikely that the amount of visas granted through a program like this would have a big impact on the employment market or wages. The unfortunate truth is, extremely few Americans choose to pursue an advanced degree in STEM, and even fewer — only 8% of all STEM Bachelor’s graduates 10 years after receiving their degree — use that degree for occupations like programming or computer science. Studies show that most Americans currently prefer to pursue other, more creative or prominent fields that use STEM competencies, like healthcare. This is where skilled immigration can be a complement to the existing workforce; filling the unmet demand for workers in the jobs for which most workers born here are not trained. In order to stay competitive globally, we need to remain at the forefront of technological innovation, and that means encouraging those who are educated in the U.S. to stay here after receiving their degrees.

Skilled immigration should be the beginning of a larger conversation about education. In the long term, an increased focus on entrepreneurship and STEM education at a younger age for all American students will help to ensure we remain at the forefront of innovation and growth. Investment in K-12 will iterate in massive gains to American society in a few generations, and will help us grow a high-tech workforce alongside our continued ability to draw and keep overseas talent. In the meantime, we can’t afford to fall behind.

Skilled, foreign-born workers were how this country was made great in the first place, and can continue to drive the engine of economic growth, all while creating American jobs. We need to pay attention to the legislation being proposed, and when we see a bill like the one proposed by Rep. Chaffetz, we need to bypass the hornet’s nest of misconceptions and competing political interests to get it passed.

JOBS Act Becomes Law

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

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

Child Protection in the Digital Age

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

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

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

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

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

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

JOBS Act Passed, With Additional Investor Protections

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

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

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

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

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

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

Policy Update: JOBS & Startup

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

Dear Friend,

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

JOBS Act

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

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

But JOBS is just the beginning.

Startup Act

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

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

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

-The Engine Team

IPO On-Ramp For Emerging Growth Companies

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

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

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

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

Spectrum: Solved? Not Quite.

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

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

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

All of which sounds pretty sinister.

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

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

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

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

Combatting America's "Brain Drain"

“America no longer has a monopoly on knowledge”.

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

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

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

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

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

Hey. No SOPA. Remember?

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

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

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

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

Public Parks for the Airwaves

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

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

Let’s break this down.

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

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

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

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

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

Honeywell, Nest, and the Next Wave of IP Protection

Intellectual property is vitally important to innovation, but there comes a point where patents are so broad that they stifle new products and technologies.  So seems the case when large, long running companies can quash younger innovators with costly, time-consuming patent lawsuits.

There’s been quite a little buzz over startup company Nest’s Learning Thermostat. Designed by former Apple engineers, it features sleek, minimalist styling with a track wheel control, like the original iPod. It operates a self-programming system based on an interview-style interface, and learns your habits in order to predict when to change the temperature and save you up to 30% on your energy bill. It can also be remotely controlled from your computer or smartphone. It’s been receiving accolades as a nifty, attractive and innovative design and has been sold out since early November.

Thermostat giant Honeywell has taken a rather sour grapes attitude to all of this and has filed a patent infringement lawsuit accusing Nest of seven separate instances of infringement.  

These alleged infringements cover the sleek, minimalist styling, or at least the rotatable ring control. The interview style interface. The energy saving features. And the feature to control remotely via the Internet. Honeywell claims that the core design and functionality of Nest’s thermostat are the direct result of years of research and development carried out by Honeywell. The 2008 Honeywell thermostat, the Prestige, does appear to offer many of the features Nest’s does.

But can you really patent the shape of a device?  Or something as ubiquitous as WiFi connectivity now is?  And if you can, should you?

Honeywell’s crusade to “protect its intellectual property” is, for the moment at least, exclusively targeted towards Nest (and Best Buy, who is selling Nest’s products) -- which seems to suggest Honeywell is more interested in keeping innovative startup competitors from entering the market than IP.  But Nest’s thermostat is not the only competitive device on the market right now.  General Electric also offers the ability to manage a “GE smart thermostat” via the internet.  When asked to comment on GE’s system, Honeywell told  All Things D: “I don’t know. I’m not familiar with that product.” Honeywell also told GigaOm last week that it had shelved plans for a “learning” thermostat 20 years ago because they “found that consumers prefer to control the thermostat, rather than being controlled by the thermostat”, and decided to focus on other innovations.

So Honeywell doesn’t (or didn’t) want to pursue this particular innovation. But it doesn’t want a slick little startup like Nest to have it either. The problem is, an industry behemoth like Honeywell has a lot more financial clout and could sink Nest with a lengthy and costly litigation process -- even if it doesn’t win the patent lawsuit, it could at least deliver a critical hit. Which is discouraging for innovation all around.  Because lets face it: Nest’s thermostat is a hot-ticket item because it fuses design with functionality in a way that’s innovative, much like Apple’s recent products have -- not just for its WiFi capability or interview-style interface.

Protection of intellectual property is important, and we must take active steps as a community to find the best solutions to issues which arise out of our new technologies with regard to those protections. But we should not stifle innovation and improvement through overly broad restrictions on the creation of products and ideas.

Google Fiber comes to Kansas City

We’re very excited to see Google announce the commencement of their Google Fiber project in Kansas City today. Google Fiber will be putting down thousands of miles of cables to create a new broadband infrastructure which will eventually see data speeds of more than 100 times faster than the average speed most Americans currently enjoy.   

The project is enabled by the Gigabit Challenge -- a competition sponsored by the Kauffman Foundation seeking entrepreneurial ideas to create innovative and forward-thinking businesses to work alongside Google Fiber. Senator Jerry Moran has been a major proponent of the Gigabit Challenge, which goes hand in hand with the core initiatives he co-authored for the Startup Act -- which we strongly support -- a bipartisan agenda for invigorating the economy through innovation.

We look forward Kansas City’s continued growth as an entrepreneurial hub, and we also look forward to further expansion of high-speed broadband to every corner the country as we look towards building the future of the tech driven economy.

70 Groups Ask Congress to Halt Work On SOPA and PIPA

In the wake of all successful protest movements, once the dust settles, the time comes to take positive action. With SOPA and PIPA dead in the water, thanks to the sustained and comprehensive efforts of the internet community; the thousands of phone calls we made, the millions of us that signed Google’s petition, it’s time for our community to come up with alternative legislation - a solution that addresses online copyright infringement without compromising free speech and innovation. 

A letter sent today to Congress and signed by 70+ companies, including Engine, Mozilla, and Public Knowledge, urged Congress to “to take a breath, step back, and approach the issues from a fresh perspective.” 

The letter warned against repeating the mistakes of SOPA and PIPA, and requested that legislative debate surrounding the issue be “open, transparent, and sufficiently deliberative to allow the full range of interested parties to offer input and to evaluate specific proposals.” That means taking into account the views from tech companies and media companies. It means seeking out information and statistics from unbiased sources.

It means keeping the users of the internet in the loop, because our input matters, and we have shown that we can and will make ourselves heard.

Read the letter, in full, here from Public Knowledge.

#censorship? Not So Much.

The well-publicized January 18th blackout was so effective for SOPA and PIPA opposition that legions of Twitter users refused to Tweet last Saturday, January 28th, organizing their go dark movement via #TwitterBlackout. The protest was over a change in Twitter’s censorship policy, and, perhaps still rabid over the (very real) threat to open internet, Twitter users flew their freedom of speech flags defiantly.  Given a few days to meditate on the issues at hand, though, it seems clear that the righteous indignation of these protesters may have been a little hasty.

Twitter will indeed be censoring tweets - on a country by country basis according to the laws of the country being tweeted in. So, if a country’s government outlaws certain content, offending tweets will be taken down - but only in that country. Olivier Basille, from Reporters Without Borders, drafted a letter urging Twitter to reconsider a policy that from his point of view, kowtows to localized censorship and could therefore potentially contravene international free speech standards.  Basille posits that the change will stifle online dissidents who have previously used Twitter to great effect to stay informed and organize protests, such as last year’s social media fuelled revolution in Egypt.

But there are plenty of arguments to suggest that this won’t be the case.  For starters, the new policy differs from their previous one in only one respect: until now, these tweets would have had to be blocked worldwide. This means that instead of completely censoring any content deemed illegal by any government, all content will be available everywhere, with limitations only in effect for the country with the legality issue. And for those worried that localized censorship will hinder activism, John Castone over at Mashable makes a good point when he says that activists are smart enough to tweet in code if need be.  Twitter explicitly says they can’t block a user unless there is “valid and applicable legal order”.

Furthermore, Twitter will be posting all its take downs on watchdog site ChillingEffects.org. It’s also worth noting that all sites have to censor content to stay within the bounds of the law (in order to avoid being shut down) -- including eBay, Google, and Facebook. Most of them just don’t tweet about it.

On balance, it appears there will actually be less censorship than before - and more transparency when censorship does occur. As effective an activism tool as it has proven to be, even Twitter can’t operate outside of the bounds of the law. By complying with government regulations, despite any questions as to the morality of these laws, the platform can remain in countries where activism might be needed most.  

How the Internet Beat SOPA and PIPA: Advocacy in a Networked World (Part 1)

From our friend, Tina Lee, at ZeroDivide. Read more here.

The Sky is Rising

We’ve all heard how peer to peer music sharing sites are keeping dollars out of artist’s bank accounts. Or maybe we know someone who works in publishing who is throwing up their hands at how sites like Amazon are choking the industry, making it impossible for them to compete. Hollywood would like you to know that downloading pirated movies is pretty much the same as snatching a handbag or stealing a car.  So everyone is agreement. Something has to be done, before our creative industries are submerged completely by cut-rate imitations. Right?

Wrong.

What if we told you the obliteration of these industries is not nigh? That actually, our creative industries are steadily growing, and that far from being a death knell, the internet is proving to be a bastion of opportunity for artists and those who enable them?

A report published by Floor64 (and proudly sponsored by us here at Engine) highlights some pretty fascinating research which shows that our entertainment industries have not only been thriving over the last few years despite the biggest recession since the Great Depression - they have been expanding.  

Take the music industry, for example.  Ok, true, the era of the rock star might be over. Big music execs no longer have the last word on who is meteorically risen to the ranks of the famous, and when.  On the other hand, what we have now, is more.  More artists producing more quality product, more platforms for those artists to market themselves on, more opportunities to create business models that are innovative and successful. More successful than you might think.  From lowering production costs, using crowdfunding, or offering up a “pay what you think is fair” payment structure, there are several non-traditional methods which have garnered incredible success, and which co-authors Masnick and Ho have found very interesting case studies for.

So yes, there is reason for people in traditional businesses in these industries to be feeling the pinch.  But by protecting the interests of these players, we’d be jeopardizing the prospects of the industry itself, of the artist, and of the consumer.  

This report is worth your time.  Read it, share it, comment.

Artists against SOPA/PIPA

We’re excited to be part of a letter put together by a handful of individuals within the creative community to highlight the harms of PIPA and SOPA, and their belief in continued openness of the Internet. These are musicians, actors, and authors that the vast majority of Americans have welcomed into their lives and by virtue, into their homes.

Like all of us, these artists are keenly aware of the harms posed by copyright infringement, but wish to highlight for lawmakers that this legislation -- which is being moved through Congress at an alarming pace -- goes too far, threatening an ecosystem they rely on to reach their current fans and find new ones.

At a time when music sales are at an all time high due to distribution methods that rely on the Internet, and entertainment spending across the board is up 15% over the last decade, it is important to remember that the web continues to open up new markets and new possibilities every day. And that our favorite content creators have been able to harness that power in ways that would never have been imaginable 20 years ago.

We all must urge the Senate and House to carefully consider the ramifications of their actions and engage everyone impacted by this legislation to ensure we are protecting rightsholders’ creations
and
the platforms they (and we) rely on.

Read their letter. Call your Senator.

Censorship Around the World

While we’ve been fighting SOPA and PIPA, other countries around the world are also waging battles against the dire consequences of internet censorship.

The oppressive regime in Belarus set a new law into effect today which tightens the already strict regulation of internet use by making it illegal for Belarussians to visit foreign websites.  The Eastern European country established an extreme level of control over internet use last year when it issued Presidential Decree No. 60 , under which ISPs are required to block access to certain types of content and specific URLs – which are so far not disclosed to the public.  A similar, US version of this legislation – the Communications Decency Act of 1996 -   sparked controversy in the mid-90’s and was eventually overturned for violating First Amendment rights.

The new law is ostensibly to regulate online commerce – that is, making sure only domestic domains are used to provide online services – and violating it will result in a misdemeanor with a fine not to exceed the equivalent of about $125.  However, the implications could be much more serious than a slap on the wrist and a small fine.  The law requires that internet cafes and individuals providing internet access to other parties be responsible for any illegal browsing or e-commerce, and failure to report illegal usage of foreign sites could result in the business being shut down.   This kind of excessive punishment essentially discourages public internet use.  The government also has authorization to change and add to the list of banned sites – a level of governmental control that civil rights groups are distressed by ( Freedom House rates Belarus’ press freedom “not free” with “substantial political censorship”).

Meanwhile, Spain has passed anti-piracy legislation remarkably similar to the SOPA bill. Under the new Sinde law , a special commission will be formed to react to copyright infringement complaints made by rightsholders.  Slightly less draconian than SOPA, the websites will have ten days to remove the infringing material before being shut down. However, the bill has generated major opposition in Spain to what people see as a misleading law enacted for the benefit of Hollywood.

These battles mark crucial junctions for the future of open internet.  Just as the rejection of the Communications Decency Act was a pivotal moment in the creation of an unrestricted and dynamic internet landscape back in 1996, laws like Decree No. 60, Sinde, and SOPA/PIPA could set the tone for a more closed, stifled, and creatively impoverished world wide web.