A Bit of Change, and Many Thanks

I’m writing today because my day-to-day role with Engine is ending in late September, and I have a lot of people to thank. From the early days of SOPA/PIPA, through JOBS Act, through the release of our first economic reports, Startup Days on the Hill, Keep Us Here, Fix Patents, Net Neutrality and so much more, I'm proud that Engine has built lasting impact in our community and I’m confident that, going forward, Engine will continue to be a leader at the intersection of technology and policy and politics. And while I could not be more proud of helping shepherd that growth to this point, I also know we didn’t do it alone, and it is a testament to the hard work of this startup community across the U.S. that we, as a community, are better today and positioned positively for tomorrow and beyond.

If you have made a phone call, signed a petition, sent a tweet, advised privately on what’s important to you, met with a member of Congress, or gotten involved in the myriad other ways so many entrepreneurs have, I want to express my gratitude that Engine could be there in some small way to help turn those thoughts and actions into a national network for change for a community providing the backbone of America’s economic recovery. To our association and affiliate partners in these endeavors, it has been my highest privilege and distinct honor to fight these battles alongside you, and I look forward to doing so for many years to come.

And to my colleagues, who have taken a chance, have worked with us and helped this organization grow, I am particularly proud to be able to say we stood shoulder to shoulder, doing what we could in hopes of making our community and our country better.

While my day-to-day role is coming to a close, I’ll remain active as part of Engine’s advisory board, and look forward to continuing to grow this organization and support this community in that role. Now, more than ever, I’m confident in Engine’s continuing role in shaping this community’s further success, and can’t wait to see the results.

The Drumbeat Continues: More Startups Call for Title II Reclassification

Today, 10 more startup companies across the United States called on the FCC to reclassify the Internet and keep it free and open for innovation. While Congress has gone home for the August Recess, the process on Internet rulemaking continues at the FCC, where startup companies continue to make their voices heard. The companies, which represent a broad swath of growing businesses all across the country, once again focused on the only real choice available for Chairman Wheeler to preserve the ability for these companies to hatch, grow, and scale in the marketplace, and that is reclassification under Title II.

Take, for example, the story of San Francisco-based microfinance startup LendUp. Their story, according to co-founder Sasha Orloff in the filing, is only possible because the rules governing the Internet allowed for free and fair competition. As Orloff writes, “Competition within this industry is fierce and, if we were founded under the rules laid down in the Chairman’s proposal, our initial cost projections could have proven prohibitive. We would have needed to pay a substantial premium in order to ensure customers could find and access us within a crowded marketplace.” Instead, LendUp is now able to provide financial assistance to people in need, while also educating their customers about the positive benefits of responsible financial behavior, all because of technology they could build on an open Internet.

We get a bit of a global influence in this batch of comments as well, because despite Europe’s having recently fought -- and won -- its’ own battle for Net Neutrality, the FCC’s proposal could have deleterious effects on global companies doing business in the United States. Publitas, an Amsterdam-based company working to optimize and present digital content in the retail space, writes that not only would the company never have been gotten off the ground in the world envisioned by the current proposal, their future is under threat as well. U.S. influence on the Internet has global reach, and because of that, Publitas Founder and CEO Guillermo Sanchez warns that “[i]f the FCC had enacted policies which infringed upon net neutrality, the Netherlands might have enacted similar ones” which would have put the original idea under threat. But also, with a “data intensive” business like Publitas, “our business would be seriously hobbled if we were in a slow lane.”

The current proposal could also have negative influences on new marketplaces, writes Shapeways, a New York-based leading marketplace for 3D Printing images and blueprints. They are responsible for 18,000 Shapeways shops already, and with 3D Printing continuing its massive growth curve, the market they empower is continuing to foment further entrepreneurial gains in the economy on the whole. But that future is uncertain because of the proposal which Shapeways says, undermines “the great equalizer.” Everyone has the same access, anyone can float their own “crazy idea.” By creating two-tier access, you sacrifice this core tenet, throttle the spirit of freedom, and ultimately kill the power of wild innovation this nation is founded upon.” They lay out their proposed solution plainly, asking the FCC to reclassify the Internet as a utility, “which it is.”

These comments and more are available on our site, and we have again extracted multiple key quotes below. For more like this, sign up at startupsfornetneutrality.org and our work to reclassify the Internet continues over the course of the summer, we’ll keep you updated with all the news and views you need to help support a better proposal and a solution that keeps the Internet free and open for innovation.

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Distinc.tt

We currently spend considerable resources ensuring that our users can quickly access the content that they need. They view high-resolution photos of restaurants, events, and people; as well as geolocation data to help with coordination. They find out what places around them are most popular and who is currently there. These tools help LGBT people stay connected and maintain a sense of community in this rapidly changing environment. As you can imagine, the amount of bandwidth that this takes up is exponentially related to our growth and success. Having to negotiate with ISPs for the same access that our competitors would enjoy is simply not an option at our stage as a startup, we neither have the time nor the money.

Badger Maps, Inc.

There are a lot of costs to starting a business, and investors and venture capitalists are only interested in funding certain types of businesses. An entrepreneur needs to pay peoples' salaries, pay for servers, buy software, pay for space to house workers, buy Ramen and peanut butter, etc. So by adding another cost — paying off Internet service providers, to keep them from putting a gun to companies’ heads — you will get less innovation in the American economy.

LendUp

Beyond competition, core aspects of our business depend on Internet speed and efficiency. From underwriting to transaction processing, we rely on large amounts of data flowing quickly to meet customer needs and ensure accuracy and security. Speed also enables our value proposition as no customer is going to sit through a credit education video that takes too long to load. Again, with competition so intense and the alternative lenders so lacking our benefits, the consequences of a borrower abandoning us for a less compliant lender that could pay more for bandwidth are high. Furthermore, as investors evaluated the potential of our business, if these would-be risks had been a reality, I am confident conversations would have been different.

Linear Air

I am a serial networking entrepreneur and inventor.  I have four Internet patents, and prior to Linear Air, I spent a decade as the CTO of a networking company (Ipanema Technologies) whose product was designed to guarantee good performance across the Internet. That makes me, as it happens, one of the world’s foremost technical experts on Internet performance, the matter at the heart of this proposal, and I can state definitively that the only way to create a “fast lane” on the Internet is to slow everything else down. Anyone who claims differently is either mistaken, or lying.

MobileWorks

We need strong network neutrality rules that keep the Internet as a level playing field. FCC Chairman Tom Wheeler should not preside over the transformation of the Internet from a level playing field that has been the greatest engine of innovation and growth the world has ever seen to being a discriminatory, heavily tolled platform controlled by an largely uncompetitive ISP industry. The Chairman’s proposal would allow ISPs to create new barriers to innovation that would harm startups like ours—and all those who may benefit for our services. It harms consumer choice, entrepreneurship, and will kill jobs.

Publitas

We need the protection of bright-line rules. We cannot make do with the FCC’s vague commercial reasonableness standard. We have no telecommunications lawyers on staff; big ISPs have hundreds at their disposal. We simply don’t have the resources to fight a legal battle on the basis of presumptions. We urge the FCC to enact bright-line rules which prohibit blocking, technical discrimination, paid prioritization, and access fees, applicable to both fixed and mobile connections, and to reclassify broadband providers under Title II of the Communications Act.

RebelMouse

The FCC’s proposal will parch the Internet ecosystem, constricting our revenues. It will also force us to pay whatever we must to put ourselves in the fast lane, and to negotiate individual deals with multiple ISPs. That is time and money that we could have spent on hiring, innovation, and growth. We also face the threat of exclusive deals, hammered out between our competitors and ISPs, giving them and them alone the right to a fast lane. We could not afford to purchase such a right, which undoubtedly would be very expensive. If any of our competitors bought the exclusive right to a fast lane, we might have to go out of business.

Shapeways

Over the past twenty years, American innovators have created countless Internet-based applications, content offerings, and services that are used around the world. These innovations have created enormous value for Internet users, fueled economic growth, and made our Internet companies global leaders. This innovation happened in a world without discrimination. An open Internet has also been a platform for free speech and opportunity for billions of users. Shapeways would not have come to life without the Internet, and the FCC’s proposal threatens our future to provide an open platform for independent businesses to flourish, even those with an inventory of one product. The proposal will further harm competition by quelling innovation among small businesses in all sectors by creating financial barriers to entry.

Fred Trotter

The Digital Divide is getting narrower but steeper, there are fewer on the ‘wrong’ side but life is getting worse and worse for those few. Our country is betting on digital health interventions working to rescue our economy but this model relies on consistent connectivity between consumer grade doctor ISP connections and consumer grade patient ISP connections. If we allow for the creation of Internet “fast lanes” we will force at least some patients and doctors into the slow lane. This will deepen the Digital Divide and significantly damage the healthcare reform efforts that are designed to rescue our country’s economy.

Poll Everywhere

Many of the concerns we would have had at our founding remain problematic today. We still run on a tight budget, and we’re not sure whether we could afford to put ourselves in a fast lane. Even if we could, that would only mean diverting money away from hiring and growth.

Meanwhile, we are terrified by the threat of an exclusive deal, forged between ISPs and a giant producer of clickers. We certainly could not afford such a deal, which would come at a great cost. If that deal forced us to the slow lane, it would be hard for us to draw in new users. We might even lose our current ones, frustrated as they would be with our slow and patchy service.

Startup Day Across America 2014

The story of startups isn’t just happening in the Bay Area or New York City. It’s happening all over the country, as we’ve learned through our growing “Startup Cities” initiative, our recent road trip with Steve Case highlighting the “Rise of the Rest,” the labor economic research we’ve done to highlight the growing impact young companies have on communities, our political work in Washington and around the country urging policymakers to support and create better conditions for startup growth.

At Engine, we’re committed to fighting from and for the startup community to grow opportunity and strengthen communities. And that’s why, for the second year running, we’re working with the Congressional Innovation Caucus and friends in our own community like 1776 and the National Venture Capital Association to come together and celebrate startups with Startup Day Across America. Startup Day is an opportunity for Members of Congress, their staff and other policymakers to meet with entrepreneurs, tour their businesses, and get a sense for how they are creating economic opportunity, right at home.

Last year’s Startup Day gave more than 100 members of Congress the opportunity to meet with startups in their home districts. This year, with events starting today, we’re hoping for even more participation from new places and new faces. We’ve got events on tap throughout the country, from Kansas City to Columbus, Brooklyn to Seattle and everywhere in between, with more being announced each day.

We’ll be pulling together highlights from these events throughout August both here and on our social channels. Make sure to follow #StartupDay on Twitter to watch startups and government coming together to learn from each other.

And, if you’re interested in hosting a Startup Day event in your hometown this August, let us know and we can connect you with your local Congressional office. (And if you call and do it on your own, let us know and post on #StartupDay!)

RFP-IT: Making It Easier for Government to Support Startups

Our Federal Government spends a lot of money. I mean, a lot of money. And with that money, they purchase many goods and services. Increasingly, many of those purchases have intersected with technology: technology that makes existing products more efficient, solutions for new and existing problems, new infrastructure to help the government manage its processes, and so on. In fact, the government buys so much stuff, whole industries (yes, plural) have been built with the singular goal of selling to the government. While these processes and industries are largely pretty boring, every once in a while something happens, the system stops functioning properly, and it becomes news.

That is exactly what happened with the mangled rollout of the much-maligned healthcare.gov website late last year.

Among the many problems uncovered by the process, we realized that those systems in place to spend the aforementioned sums of money are not always best at finding the most efficient projects, programs, and services to buy. In fact, healthcare.gov was just latest high-profile example of the problem. Many, if not most, of the issues faced in federal government procurement are situated squarely in the fact that these laws and regulations represent a different time, and have been made archaic by advances in technology.

Stepping into that breach with an innovative solution of her own is Silicon Valley’s own representative, Anna G. Eshoo. The Democratic Congresswoman, a longtime supporter of the technologies that lead the world from her home district, today introduced the Reforming Federal Procurement of Information Technology (or, RFP-IT) Act which seeks to make these processes more open, easier to navigate, and more accessible to startup companies looking to sell to the Federal Government.

The bill, co-sponsored by a bipartisan coalition of Rep. Eshoo’s House colleagues, has three specific goals. First, it will enhance competition in the marketplace by enabling more small businesses to bid on federal IT contracts without having to spend thousands on compliance costs by lifting the threshold for a streamlined contracting process from $150,000 to $500,000. According to Eshoo’s summary of the bill, “expanding the use of simplified acquisition procedures will shorten procurement lead times and help level the playing field for start-ups and small businesses – a critical factor in an IT marketplace that is characterized by the constant influx of new entrants and rapidly evolving IT products and services.”

Second, the bill takes a number of steps to promote innovation, including codifying the popular Presidential Innovation Fellows program, and asking the General Services Administration to recommend how to slim-down certain procedures.

Finally, the bill moves to ensure more accountability by establishing a Digital Government Office within the Office of Management and Budget, strengthening the existing CIO office in the White House and improving transparency and oversight.

You can read the full text of the (very short!) bill here. We thank Rep. Eshoo and her colleagues for highlighting one of the ways our government functions, and working to bring more efficiency and innovation into the process.

ECPA Pushes Past 235 Co-Sponsors

For the last few months, we’ve closely watched the progress of a bill in Congress seeking to reform and update the Electronic Communications Privacy Act. We’ve discussed the current law’s outdated regulations of our communications infrastructure, but a piece of that could be updated very quickly through Kansas Congressman Kevin Yoder and Colorado Congressman Jared Polis’ Email Privacy Act. Essentially, as we’ve noted before, law enforcement currently doesn’t currently need a warrant to read your email--leaving many startups in the unenviable position of not being able to protect their customers. We think this is wrong, and it turns out a bunch of our elected representatives agree.

Less than a month ago, we noted that the bill had reached 218 co-sponsors, fully half of the House of Representatives, and which, let’s face it, is a monumental achievement with such a divided Congress, and a testament to ECPA reform’s popularity. With this week’s announcement that six more Republican co-sponsors are signing on, that number has now ballooned to 235 and is threatening to climb even higher.

Even as we creep closer and closer to mid-term elections, there are certain things Congress can still do while it’s in session. The Email Privacy Act, which would drastically enhance both privacy and security for Internet users and bring our laws into the 21st Century, is a great example of the “art of the possible” and we encourage the House to listen to itself and pass this much-needed reform swiftly.

More Companies Comment on Net Neutrality

In our continuing series of filings with the FCC and their open docket on Net Neutrality rules, we have a series of comments this week from a broad range of companies and organizations, again focusing on one critical viewpoint: that the Chairman of the FCC has within his power the ability to reclassify the Internet as a utility under Title II, and that he should do so. From the web, Opera Software is one of the world’s leading web browsers with more than 350 million users worldwide, and comments have been written by Chief Technology Officer Haakon Wium Lie from their head office in Oslo, Norway in support of reclassification with a global perspective. 

Opera Software services many users in sub-optimal situations, mostly those with poor connectivity or lower-end devices, which is first among many reasons that in a marketplace designed for ease of switching with only marginal cost, speed is a key factor in retaining consumers. And with one of Opera Software’s key differentiators being their proprietary compression service, Lie points out they would “have to” secure fast lane agreements under the Chairman’s proposal in order to stay effective for their users. In a sense, Opera Software provides a service on the margin for those on the margins of our society, and the reason they do so is that the Internet is the great equalizer. Even those without the latest and most powerful devices, or the best connectivity and bandwidth, can still explore the vast recesses of information and connect with people around the globe.

And, as Lie points out, if other countries copy the FCC’s current proposal, we run the risk of continuing to chip away, not just at the innovative Internet which has brought us so many products and services to enrich our life, but the very fabric of the community built online by restricting access to those who may not be able to afford to connect. In that “undue bureaucratic burden” says Lie, we find the greatest cause for alarm, all of which can be averted, in his words, by reclassifying the Internet as a utility under Title II of the Telecommunications Act.

We also hear from organizations in the global health space, including the Global Healthy Living Foundation, which creates disease-specific communities and networks to help many facing chronic illness get the support they need. And from the interactive world, Heyzap and TouchCast create new experiences online. Without rules that keep the Internet open for innovation, their businesses won’t reach their users.

In all of these cases, especially in the delivery of high-bandwidth content like YouTube videos or other interactive devices, user experience could be hamstrung to the point of dysfunction without clear rules keeping the Internet open for innovation. “If we aren’t in a fast lane, by definition we are in a slow lane,” says GHLF. According to Heyzap, “If we had pay a special fee to each phone company to get the same treatment as our competitors, we would have to slow our growth and our hiring,” and that even if litigation under commercial reasonableness standard were available, it wouldn’t help them with ISPs. And TouchCast points out, “When someone views a TouchCast, they not only stream video, but also download web pages and data from the Internet all at the same time. Any perceived delays in video streaming rates or the presentation of any other information within a TouchCast would result in high consumer abandonment rates.”

We have links to the full comments comments and some key quotes below. If, like any of these organizations, your business and customers will be adversely affected by the Chairman’s proposal, sign up with us at startupsfornetneutrality.org. And if you can file a comment, let us know at comms@engine.is.

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Opera Software

“In the hyper-competitive market for web browsers, speed is key. Consumers will switch browsers to experience the web marginally. Competition would suffer if some browser vendors have fast lane arrangements, or if the non-fast lanes do not provide sufficient capacity. Under the Chairman’s proposal, in order to have a viable web compression service, we would have to secure agreements for a fast lane. “

“Our worst-case scenario is that other countries copy FCC’s proposal. The United States is not only influential with new technological innovations, but also Internet policy. Opera Software would never be able to provide web companies, including U.S. companies, with access to 350M end users if we had to negotiate Internet fast lane agreements with all network operators globally. If other countries follow the logic of the FCC proposal, we and other Internet companies would have to prioritize countries and regions.”

Global Healthy Living Foundation

“We are the first source of health-related news for thousands of people. When several contaminated vials of methotrexate (an arthritis medication) were recalled, we were one of the first organizations to reach out to the people in our community. Within two hours of disseminating the recall message through the Internet, we received two replies from members who were scheduled to take the contaminated medicine that afternoon. Our ability to quickly and efficiently reach a large number of people very likely saved lives. If we had slow or patchy service, we likely would have had a much smaller network that relied on us less often for information.”

Heyzap

“We could not have become the company we are today under the rules proposed by the FCC. We provide real-time recommendations of apps based on data gathered from users. This requires gathering a lot of data, bringing it to our computers, processing it, and sending recommendations and ads back to our users—all in fractions of a second. We need to process a lot of data, quickly. Any limitations in speed or consistency of our service would be noticeable to our users.

Meanwhile, under the Chairman’s proposed rules, broadband providers have strong incentives to make the differences between their standard and premium access options noticeable. If there were no noticeable differences, then no edge provider would feel the need to pay for premium access.”

TouchCast

“We are hoping to change the way people watch videos and TV. Established broadcast companies are wealthy and powerful, and they could easily forge exclusive agreements with broadband providers and lock us from those providers’ networks. While the Chairman’s proposal prevents NBC from forming an exclusive agreement with its affiliate, Comcast, it does nothing to prevent NBC from forming the same agreement with Verizon, or CBS with both Verizon and Comcast. These exclusive agreements could shut us out of the game entirely.”

Education Startups File Net Neutrality Comments with FCC

As you likely know by now, this summer is key in the fight for net neutrality and an open Internet. It is crucial for stakeholders to take this time to file comments at the Federal Communications Commission explaining why an open Internet is essential to their life and  businesses. Today, with our help, four startups in the education space -- who work directly with students to help them acquire the necessary skills to compete in the very global economy -- did just that.

The comments, filed by Codecademy, CodeCombat, General Assembly and OpenCurriculum, all make the central point that harm to net neutrality is harm to startups. In this case specifically, harm to education startups is harm to the pursuit of knowledge and America’s ability to compete in a global technological marketplace. And all four believe that harm can be mitigated by reclassifying the Internet as a utility under Title II of the Telecommunications Act.

We’ll be working with more startups to file comments as the summer continues. We want to make sure that startups in every industry have a voice in this debate. If you are interested in filing comment for your business, and would like our help, email us at comms@engine.is for more information. We hope you’ll join the fight and help us preserve an Internet free and open for innovation.

The existing comments will be posted to the FCC’s comment intake page and are available below for you to read at length:

Overall, these education startups reflect a wider community belief that reclassification is the best (and only) way to achieve the necessary end goal of making sure the Internet does not devolve into a mess of paid prioritization -- or fast and slow lanes. Staying this result is critically important in the field of education, where margins are tight, business is seen as a service, and the outcomes may provide the best fix yet for our economy on the rebound.

From CodeCombat comments:

When CodeCombat first started, resources were scarce, and if we had to negotiate with and pay funds to ISPs, we would have been unable to do so. At that time, we also would not have been able to use the FCC’s standard of “commercial reasonableness” or even a public advocate provided by the FCC to protect our interests. We still may not be able to do so.

...

Almost a million people have learned to code using CodeCombat, including 343,000 students during Code.org’s Hour of Code, a campaign that both President Obama and Republicans encouraged and embraced.We’ve also helped thousands of more experienced programmers hone their skills with more advanced levels. In addition, we’ve translated our game into 40 languages so that students around the world can learn to program as well.

...

We firmly oppose the FCC proposal. We urge the FCC to reclassify ISPs as common carriers under title II of the Communications Act of 1934 to prevent technical discrimination, paid prioritization, interconnection disputes, and the host of other harmful issues which would arise as a result of the adoption of the proposal.

From General Assembly comments:

With national attention on the rising cost of higher education and the crippling debt for recent graduates, General Assembly offers an important outlet for students looking to receive a high return on investment from their education. Over 100,000 students have benefitted from our services, including our 10 - 12 week long immersive programs and our three-month apprenticeship program that provides students with a paid opportunity to further hone their newly-acquired skills on the job.

...

Clear rules are important in promoting innovative enterprise. The factors of the commercial reasonableness test are too vague to provide certainty. These standards include “harm to consumers” or “to competition” and evaluation of a totality-of-the- circumstances. Such a standard will only lead to expensive and time-consuming litigation that start-ups cannot afford and which will therefore curb entrepreneurial activity to the benefit incumbent players and their legal teams.

General Assembly believes we need strong network neutrality rules that prohibit blocking, discrimination, and access fees. These require reclassification under Title II of the Communications Act. The Internet works well today; allowing ISPs to price discriminate will harm businesses like ours, the general public, and the economic well-being of our country.

From OpenCurriculum comments:

We want to spend our time and resources transforming education, changing the lives of teachers and students, with the awareness that such education will have lasting impact on today’s young people throughout their entire lives and benefit society in general. Asking us to negotiate for “commercially reasonable” deals in light of our larger competitors being willing to pay a premium to keep us out of the market is rigging the market so we (and other entrants) lose. “Comforting” us with the right to hire lawyers and expert witnesses, or wait years for an FCC Ombudsman to win or lose a case whose legal standards are also stacked against us, provides no comfort.

….

Even if we find ways to pay for premium tiers with different cable and phone companies, this is going to significantly eat into our capital ­ affecting the way we grow and our ability to allow more teachers in the United States and around the world to get access to better quality teaching materials for the future generations.

...

The FCC should instead reclassify access to the Internet as a common carrier service and forbid unreasonable technical discrimination, define pay­-for­-play deals as inherently unjust and unreasonable, define access fees as inherently unreasonable charges, and apply these rules to both mobile and fixed platforms.

From Codecademy comments:

Codecademy is an innovative solution for schools and students to save money. Our company also has an important impact on job creation. We're building the basic steps of competency to help people start their own companies, websites, apps, and products and get entry level jobs right now. The next big thing, or an innovative solution to a social problem, could be developed by someone who learned how to code using Codecademy.

But none of that may happen if the FCC adopts its fast-lanes proposal and abandons an open Internet.

Senator Markey: FCC Already Has Power to Save the Internet

UPDATE 7/15/14: Sen. Markey has rallied fellow Democratic Sens. Chuck Schumer, Al Franken, Ron Wyden, Richard Blumenthal, Jeff Merkley, Elizabeth Warren, Sheldon Whitehouse, Ben Cardin, Kristen Gillibrand, Cory Booker, and Barbara Boxer, as well as independent Sen. Bernie Sanders of Vermont, to sign his letter telling the FCC they already have the power to save the Internet and reclassify under Title II. Here is a draft of the letter. Sen. Ron Wyden also backed the push for Title II "common carriage" regulation in a comment to the FCC. Wyden wrote that the FCC should call the Internet what it is: a "telecommunications service."

The last time Congress took up the issue of how to regulate telecommunications (telephones, broadcasting etc.), the Internet was but a dream, haltingly emerging into reality. It was 1996. At the time, then-Representative Edward Markey of Massachusetts was the lead Democratic co-sponsor of the Telecommunications Act in the House of Representatives; he shepherded the bill through various committees and the floor of the House, ultimately becoming a leading champion for the Internet along the way before the bill was signed into law by President Clinton.

Fast forward to today, and the Internet as we know it, shaped in large part by the 1996 Act, is under direct assault. Now-Senator Markey is still an advocate for the power of the Internet and is working to protect the needs of consumers and businesses nationwide.

The Senator is asking his fellow Senators to sign a letter urging FCC Chairman Tom Wheeler to make use of the power they believe is already afforded to him by the Telecommunications Act to reclassify the Internet as a utility under Title II. Only with reclassification under Title II can the FCC ban paid prioritization (fast-lanes) on the Internet.

As we’ve documented extensively, we agree with this sentiment and urge the Chairman to do exactly that. You too can help by urging your Senators to contact Senator Markey’s office and sign the letter. This battle must be fought on a number of fronts, and this is one where we have an opportunity to exert pressure.

Call your Senator today, and tell them to sign on with Ed!  Tell Chairman Wheeler to do what he has the power to do: reclassify the Internet under Title II.

New Legislation Revives JOBS Act Intentions

When I sat in the Rose Garden in April 2012 watching President Obama sign the JOBS Act into law, I remarked to myself, and anyone who would listen, just how far “the Internet” had come in terms of polished political activism and policy coherence in such a short amount of time: The JOBS Act was passed in six weeks. As originally intended, JOBS Act would have opened up new avenues for investment in early-stage startups, providing new ways for entrepreneurs to secure the funding they need to turn their ideas into reality.

But, just two years later, there are many within this community who have been left disheartened by the haphazard implementation of such an important law, and have also become hamstrung by the limitations put on them by the Securities and Exchange Commission -- in stark contrast to the spirit of that legislation.

The crowdfunding for equity provisions have yet to become a reality. And, perhaps more importantly, provisions on general solicitation aimed at making it easier for startups to widen their investor base in a more rational way, as opposed to the previous, wink-and-nod style capital formation, have made the situation worse to the point of being untenable for many early-stage companies, especially those who grow through accelerator programs.

Luckily, news from Washington this morning signals the beginning of a solution we hope will make the JOBS Act work for startups, angel investors and all those who wish to join their ranks. Dubbed the Helping Angels Lead Our Startups, or HALOS, Act (clever, because they’re supporting angels!), this important legislation, offered in a bipartisan manner in both houses,but led by Illinois Democrat Rep. Brad Schneider and Ohio Republican Rep. Steve Chabot, would change the Regulation D rules governing General Solicitation to once allow “Demo Days” to continue once again.

Demoing early stage startups and their products has been a key way for companies to accelerate growth, but the unintended consequences of JOBS Act’s rulemaking at the SEC have complicated the process by which these startups can present their groundbreaking ideas. The current status quo stands in total contrast to the original intent of the legislation, and unfortunately we need a further fix.

Luckily, Reps. Schneider and Chabot have been joined by Sens. Chris Murphy (D-CT), Patrick Toomey (R-PA) and John Thune (R-SD) to provide that legislative fix in the form of the HALOS Act. You can read the (short) bill in its entirety here. We encourage you to reach out to the co-sponsors and thank them for their foresight here, as well as to your own representative and Senators urging them to pass this important legislation.

There Are Lessons To Be Learned Outside Silicon Valley

Skip Newberry, President of the Technology Association of Oregon, co-authored this post.

When asked for a general perception of what the startup community looks like, all too often people will volunteer information about bespectacled youths wandering around Silicon Valley with bundles of money, wearing ironic t-shirts, sipping single-origin coffee, and creating apps for you to while away time on your commute. It is, in a sense, the same type of reaction to the Portlandia phenomenon. Neither of these characterizations is entirely false–to be fair there is a lot of bird-related art throughout the Rose City–but there is a truth behind both perceptions: a new birth of economic growth and prosperity that cuts across traditional socio-economic lines that can be an enormous force for good in our communities.

Earlier this year, Engine teamed up with the Technology Association of Oregon to tell the story of Portland’s startup community. It’s the first part of the Startup Cities series that will profile more underrepresented communities around the country where startups are taking root and presenting new avenues for cities to capitalize on the innovation of its citizens to benefit the community as a the whole.

Portland was chosen as the pilot first because the city’s long history of entrepreneurship has translated very quickly into a supportive, thriving and prosperous startup community. The technology industry in the Portland Metro Area was the fastest growing in the country during the past ten years. In this same time period, the Portland Metro Area climbed to 9th in the country for startup density, and is attracting increasing levels of talent from Seattle, San Francisco, New York, Los Angeles, and Denver. Large companies such as ebay, Salesforce.com, Walmart Labs, SquareSpace, and Airbnb are also taking notice and expanding into the area.

And we know from Engine’s research that community benefits extend beyond the high wage tech jobs created. For every person a technology startup hires, 4.3 additional jobs are created in the local non-tradable sector. That’s everything from bakers to bankers, plumbers, and lawyers. Within Portland’s thriving startup community, these effects are visible and powerful.

But even more importantly, the community in Portland knows that to succeed everyone must work together. Serial entrepreneurs are becoming angel investors, helping entrepreneurs new to the scene jump in with both feet and grow products into businesses, and creating staying power that will help Portland succeed for years to come.

While no two entrepreneurial communities are alike, and replication of success stories can be a fool’s errand, the lessons of togetherness and support are ones on which Portland can lead, ones they can export, and in doing so become a leading community.

And Portland is just the first stop. It’s important that we start to look at the technology industry everywhere it exists to build a fuller picture of the community that is fast becoming the American electorate at large.

Big Day for Open DATA

The Federal Government has taken a big step towards reforming the way it buys, uses, maintains, and publishes data with the unanimous passage of the Digital Accountability and Transparency or DATA Act.

The bipartisan measure, which now goes to President Obama for his signature, would open up the way we track spending across government agencies, and was sponsored originally in the House by Oversight and Reform by Chairman Darrell Issa (R-CA) and Ranking Member Representative Elijah Cummings (D-MD). A companion Senate measure was sponsored by Senators Mark Warner (D-VA) and Rob Portman (R-OH).

What does this mean in practice? Hudson Hollister, Executive Director of the Data Transparency Coalition, explained what the DATA act will do for government transparency in Forbes earlier this month:

If the DATA Act is fully enforced, citizens will be able to track government spending on a particular contractor or from a particular program, payment by payment. Agencies will be able to deploy sophisticated Big Data analytics to illuminate, and eliminate, waste and fraud. And states and universities will be able to automate their complex federal grant reporting tasks, freeing up more tax dollars for their intended use.

This sort of transparency in government allows ordinary citizens to better track how government is using technology, and it will also allow government to better source information technology projects, and understand how tax dollars are being spent in an effort to streamline those multifaceted processes.

Of course, there will also be benefits for the startup community. Understanding how government money is being spent could make it easier for our most innovative companies to break through the procurement process.

We applaud the work of Chairman Issa, Ranking Member Cummings, Senators Warner and Portman, and everyone else who helped shepherd this vital legislation through the Congress. We look forward to continued efforts to leverage data in productive ways. 

Julie Samuels Joins Engine As First Executive Director

The Engine team and board are excited to announce that Julie Samuels has agreed to join as our first Executive Director, and has been appointed President of Engine Advocacy and Engine Foundation.

Julie has served on the Foundation board since its formation in 2012, where she has been an invaluable resource for the organization. Now we’re delighted to have convinced her to join us full-time.

Julie’s appointment is a major turning point for us. Today, Engine is a still-growing nonprofit organization (two, technically) and our staff produces economic reports, and provides policy guidance, direct advocacy, and member services to hundreds of startups. Engine’s staff and volunteers have done an amazing job of self-directing and building the organization you see today, with leadership coming from within the team, and from board members.

Julie’s job is now to take the organization through its next growth phase. She has committed to growing the team (we’re hiring!), launching a new policy fellowship program, building up a more substantial and diverse funding base, and exploring the social issues around technology in addition to Engine’s core set of focus areas. 2014 is going to be a big year.

And for those who don’t know Julie, she’s joining us from the Electronic Frontier Foundation where she was a Senior Staff Attorney, and the Mark Cuban Chair to Eliminate Stupid Patents (we swear). She’s also on a number of advisory boards, is a regular speaker at a host of prestigious places (CES, Harvard, Princeton - you get the idea), and Julie started her career as an entertainment and IP attorney. But Julie’s no ordinary lawyer. She was an advocate and journalist before law school at Vanderbilt, and interned at the National Center for Supercomputing Applications -- where the modern internet browser was born -- while still an undergraduate at the University of Illinois.

Since then, Julie has argued in the Megaupload case, has written a number of briefs for our nation’s highest courts, launched TrollingEffects.org and advised countless startups. Not to mention the hard work of maintaining a Twitter account in her dog’s name! (You can follow Julie on Twitter here.)

We believe there’s nobody better to represent startup entrepreneurs around the country, and make sure we do everything we can to foster economic growth, innovation, and achievement -- in the United States and abroad.

If you’re at SXSW this week and next, please stop by any of our many events, including this immigration reform event with many of our tech partners, and give her a warm welcome.

You can also find the press release about Julie’s appointment here.

New Bill Takes Aim at Patent Demand Letter Abuses

Since the end of last year when the House passed the Innovation Act with a resounding bipartisan majority, the President has announced his intention to sign the bill, and he made a strong statement in support of reform in this year's State of the Union address. But we've still spent the early months of 2014 working with Senators, and urging the Senate to act on pending legislation. Today, a new bill was added to the list. The Transparency in Assertion of Patents Act, introduced by Senators McCaskill (D-MO) and Rockefeller (D-WV), is an important bill that would protect consumers and small businesses by curbing the patent demand letter problem.

While the Innovation Act brought great gains to our community by squaring-up against patent trolls, the demand letter problem, which for jurisdictional reasons was left out of the House package, remains a grave concern. Last year, when we launched the demand letter database, Trolling Effects, with EFF and a coalition of tech advocacy organizations, we wrote:

The letters demanding these payments are often evasive, failing to include details about the patents, who owns those patents, and the products or services that allegedly infringe. They fail to give recipients the information to make rational decisions, such as whether they should pay the troll, ignore the letter, or go to court to fight it. Just hiring a lawyer to ascertain that seemingly simple information can easily cost well into the tens of thousands of dollars.

The letters raise even more fundamental concerns, too. Because they happen before a legal complaint is ever filed, they are not part of the public record. And once a settlement or license is signed, it will likely include a non-disclosure provision, prohibiting the letter's recipient from talking publicly about its contents. This means that the scope of the problem is often underreported, making it harder for policymakers to understand the true scale of the patent troll problem.

Here is what Sen. McCaskill and Sen. Rockefeller's bill would do:

• Require that demand letters contain certain basic information, such as a description of the patent at issue, a description of the product or service that allegedly infringes it, contact information for the patent's owners, and disclosures of ongoing reexaminations or litigations involving that patent.
• Define as an illegal, unfair, or deceptive practice certain egregious behaviors, such as sending letters threatening litigation without a real intent to file litigation, or sending letters that lack a reasonable basis in the law.
• Give state attorneys general explicit power to to target similar bad behavior in their own states.
• Allow the Federal Trade Commission to enforce these rules by levying penalties of $16,000 per each violation.

Signing this bill into law would go a long way to stopping some of the worst demand-letter abuses. We applaud Senators McCaskill and Rockefeller, and look forward to supporting this piece of legislation as it works its way through the Senate.

Speaking of which, urge the Senate to take action on this bill, and other essential patent reform measures, here. 

Engine Discovers Tech Cities Across America

This year, Engine is hitting the road to tell the stories of entrepreneurial communities in cities and towns all across America. With a video series, produced by our own Daniel Schwartzbaum, we’ll shine a light on founders and entrepreneurs, asking them why they do what they do, and what it is about their community that gives them the support they need.

We chose Portland for a our pilot project -- just a short flight from our home here in San Francisco, but light years away in terms of community building. What we found was a collaborative atmosphere where founders, capital investors, city and state government, and other local organizations came together to build, with intention and thoughtfulness, a community that feeds on the boundless energy of its proponents.

With the generous support of the Technology Association of Oregon, and their President, Skip Newberry, we have started to put together the film on what we found.

Here is just a taste: the preview trailer we produced for TAO’s office opening party last week. The full episode will be out soon. During the rest of this year, we want to discover more tech cities around the country -- let us know if you and your community want to be involved. We can't wait to hear your story.

What's Up With Patent Reform?

With momentous bipartisan support not often seen from Congress these days, the Innovation Act, targeting patent trolls and their abusive practices, passed the House of Representatives with 325 votes to 91. That this Congress, with its historic levels of impasse, was able to come together to pass this bill speaks volumes about the extent of the patent troll problem. As some of us know all too well, patent assertion entities have cost US businesses time, talent and money -- not to mention the incalculable chilling effect their tendencies for extortionist litigation have had on innovation.

Now, the patent reform effort moves to the Senate with the Patent Transparency and Improvements Act introduced by Senators Leahy and Lee. The Senate bill reflects some provisions from the House bill, including fee-shifting and a system that would allow stays in lawsuits against customers and end users -- but this bill definitely is more narrowly focused on egregious litigation abuses.

This bill suggests new guidelines for dealing with demand letters. Under Senator Leahy’s Act, demand letters must include a statement of the patent asserter’s identity, the patent being asserted, and the reasons for the assertion. Additionally, the Senate bill would authorize the FTC to act against unfair and deceptive practices associated with the sending of fraudulent or materially misleading demand letters. With a nod to the root of the problem -- poor quality patents -- this bill would also improve patent review procedures requiring that the PTO apply the same claim construction used in court, rather than the “broadest reasonable interpretation.”

While Democratic leaders on the House Judiciary Committee announced their support for the Leahy-Lee approach over Representative Goodlatte's House bill, a number of Senators are urging general restraint after pushback from the university community and unease over loser-pays provisions.

We hope the Senate will act, as the House already has, with determination and all speed to remedy this issue. While there is also hope on the judicial front with the Supreme Court is set to consider the validity of software patents, every day we wait to address the scourge of patent trolling we’re wasting millions of dollars combatting a problem we can begin to remedy with the stroke of a pen. We look forward to working with our allies in the Senate to bring this bill up for a speedy resolution.

Photo courtesy of Talk Radio News Service.