AZ Governor innovation finalists announced

Congratulations to the winners listed below.

I’m glad to see the state government recognizing innovation in Arizona. Now we just need to convince our legislators to get serious about passing the legislation needed to attract capital investment in Arizona startups.

Winners in categories including Community Service Leader of the Year, Young Innovator of the Year and Green Innovator of the Year – new for this year’s contest – will be announced at a awards banquet on Nov. 13 at the Dodge Theatre in downtown Phoenix.

The other finalists are:

William F. McWhortor Community Service Leader of the Year:

– Daniel D. Von Hoff, MD, TGen Clinical Research Services at Scottsdale Healthcare

– Jeff Morhet, InNexus Biotechnology Inc.

– Terree Parlett Wasley, ASU Technopolis

Ed Denison Business Leader of the Year:

– Steve Irons, ImageTag, Inc.

– Roy Vallee, Avnet, Inc.

– Jeff Morhet, InNexus Biotechnology Inc.

Pioneering Innovation:

– Telesphere

– Aviation Communication & Surveillance Systems

– Microsoft Corp.

Green Innovator of the Year:

– i-Linc

– Trilogy by Shea Homes

– Global Research Technologies LLC

Innovator of the Year (small company):

– Succeed Corp.

– Kutta TechnologiesInc.

– Infusionsoft

Innovator of the Year (large company):

Raytheon Missile Systems

– IBM Corp.

Innovator of the Year (academia):

Phoenix Mars Mission (University of Arizona)

– Arizona Biodesign Institute (Arizona State University)

– Center for Applied Nanobioscience (Arizona State University)

“Best of the Best” of the Arizona Engineering and Science Fairs (grades 9-12):

– Steven Fan, Tucson High Magnet School

– Shemonti Hasan, Hamilton High School

– Adrian Laurenzi, Tucson High Magnet School

– Smitha Ramakrishna, Coronoa del Sol High School

Teacher of the Year Award Winner:

– Kenneth Zeigler, Eagle Point School

[From Governor’s innovation finalists announced]

and… Speaking of the Innovation Gap…

From Techdirt… this image was captured at the Republican National Convention.

At the Republican Convention, Matt Yglesias catches a funny picture of an AT&T poster touting the company’s enthusiasm for the patent system. It reads: “life, liberty, and the pursuit of more patents. AT&T: Averaging 2 patent applications per day. Proudly connecting political supporters in Minneapolis.”

Photo by Matt Yglesias at Minneapolis-St. Paul Airport.

It’s interesting that AT&T is bragging about its pursuit of “more patents” rather than, say, more R&D spending or more innovation. AT&T isn’t exactly known for its record of high-tech innovation, so it’s a little surprising to see it hold itself out as a poster child for the patent system—particularly when we remember that AT&T and other telco incumbents have used the patent system to extort tens of millions of dollars from companies like Vonage that are actually innovating.

[From Life, Liberty And The Pursuit Of More Patents?]

Aside from the “companies like Vonage that are actually innovating” bit Timothy gets it right. Patents are not innovation. They are a construct designed to protect innovation, but sadly have become a business model unto themselves.

Klausner Continues To Sue Everyone Over Visual Voicemail Patent

From Techdirt today:

You may recall stories involving a small patent holding firm called Klausner Technologies, which claims to hold patents on the concept of “visual voicemail.” It seems to have interpreted these patents pretty broadly to the point that it considers anyone who offers any graphical interface to voicemail as infringing. Over the years, that’s meant lawsuits against AOL, Vonage, Apple, eBay, AT&T and others. Apparently, suing one by one was too much trouble, because Klausner has now sued another bunch of companies including Google, Verizon and Embarq. Of course, the company is playing up the fact that all those other companies it sued settled, but we’ve seen that game before. There’s not much new here as this scenario is all too common. We have a company with an overly broad patent on a concept that was a natural obvious progression of the art, suing pretty much every company that actually innovates, thus making actual innovation more expensive.

[From Klausner Continues To Sue Everyone Over Visual Voicemail Patent]


It isn’t that I don’t like patents… it is simply that a patent without the innovation required to make it a useful product or service should have NO CASH VALUE.

A patent of this kind is simply a documented idea. Ideas are great… executed ideas are better… ideas which generate revenue are a business. When your business becomes owning (broad, vague and easily malleable) ideas and suing people for using those ideas in a business you are simply a parasite.

You generate no value – you wait for others to generate value and then leech some off because they “used your idea”. The fun part is, they don’t even have to really use your idea… they just have to come close enough to some overly broad idea you wrote down 5 years ago to allow you to sue them. If it is a big company, and you make your claim reasonably valid and for a reasonable dollar amount… they’ll just pay you off to avoid the court costs.

Congratulations – you’ve added nothing to the world and made everyone else’s job harder.

Voice Is Data – STOP THE PRESSES (Alexander Graham Bell would be so proud)

From Techdirt…

With increasing attempts to turn internet access on in the sky, there’s been some concern about people making VoIP calls from airplanes, just as there is a concern over mobile phone use in the sky being too “annoying.” Some of the companies providing internet-in-the-sky have claimed that they would block VoIP calls, but that’s going to be pretty difficult. As we’ve pointed out in the past voice is just data and you can always find a way to disguise the data, such that it won’t be blocked. And, indeed, that seems to be exactly what’s happening. Andy Abramson talks about how he got around AirCell’s VoIP blocking when talking to a friend who was on one of these wired airplanes. There’s always going to be away around those things, so unless Congress really decides to ban all voice calls on phones, why not wait and see if people chatting really is a problem?

[From Voice Is Data: Tech Won’t Be Able To Stop VoIP In The Air]

There are two points here worth considering:

  1. VoIP is data and any attempt to block it can be worked around
  2. Phone calls on planes may not really be a problem

First – saying VoIP is data is (perhaps) the most obvious statement I’ve ever heard. But let’s clarify one thing. Transmitted (by any means, analog, digital or IP) SOUND is DATA. Always has been, always will be. We shouldn’t confuse the fact that it is now on an IP network with some kind of transition to “voice as data”.

The valid point is that because the sound (voice) is being transmitted over an IP network blocking is only as effective as the ability to detect the transmission of sound (voice). If everyone plays be the rules and uses RTP over UDP – it is simple to block. However, there will always be profit in circumnavigating IP blocking technologies – to the extent that there is profit, there will be people willing to create VoIP services that defeat the blocking.

The linked article points out the the reported “hack” is no more than RTP over TCP – which is fairly pedestrian. Imagine when RTP is tunneled over HTTP (I’ve done it) or SSH.

The simple reality is making the network the arbiter of acceptable use is never going to work.

Second, I’m not sure how we got to “people chatting on a plane is a problem”. Not too long ago, every flight seemed to have those air to ground phones in the back of the seat in front of you. People never used them – because the per minute charges were insane. But I’ve been on a flight where someone used that phone… and there was no lynching.

I’m wondering if “no calls via cell or VoIP” on a plane is about social norms and people being rude… or the airline’s inability to charge for it…

How the RIAA/SoundExchange and Congress are using trust exemption to kill internet radio…

Anti-Trust exemptions are a big deal. They grant certain groups and industries the government backed ability to stifle competition. They also work when our elected representatives treat these exemptions with a certain degree of mis-trust. When, however, our lawmakers begin to see these exemptions for certain industries as important to protecting the rights of the few against the rights of the many things like this happen:

From the Boy Genius Report

As traffic to Pandora continues to climb at an impressive rate, far more steep than that of competitor as seen in the chart above, the popular custom internet radio provider may be a breath away from closing its doors. Why, you might ask? The answer is not very far from being obvious these days. Wherever there is an emerging revolution in the realm of music consumption, loved by many yet still on the brink of defeat; the RIAA is never far from the scene. Pandora’s current woes fit the mold precisely. Pandora usage is at all all-time high and usage increased by almost two million visits per month from June to July alone, yet elevated royalty rates are making it nearly impossible for the company to stay afloat. After last year’s decision that internet radio provider per-song royalty rates would double there has been an ongoing battle between providers and SoundExchange, an unincorporated division of the RIAA tasked with collecting royalties from digital providers such as satellite and internet radio. The decision determined that the rate would increase incrementally from .08¢ per song per listener in 2006 to .19¢ per song per listener by 2010. While tiny fractions of a penny seem insignificant, they add up quickly. Pandora projects that it will pay out about $17 million this year, or a staggering 70% of its revenue, in royalties. Long story short, it is losing money. The problem is even worse for smaller internet radio providers, where increased royalty rates are expected to amount to between 100% and 300% of annual revenues. Translation: By way of SoundExchange and lawmaker support, the RIAA would rather wipe internet radio off the map with outrageous royalty rates than find a fair way to make some money for its clients (musicians). Why is that? There is no way for us to say but as per-song performance royalties are positioned to wipe internet radio off the map, it should be noted that terrestrial radio pays no such fees.

Tim Westergren, Founder of Pandora, had this to say to the Washington Post:

We’re funded by venture capital. They’re not going to chase a company whose business model has been broken. So if it doesn’t feel like its headed towards a solution, we’re done.


There is nothing fundamentally wrong with artists being paid for the use of their work. There is something very wrong when they use that power to effectively shutter an entire method of distribution because the do not like it. That is simply abuse of their anti-trust exemption.

The proof is fairly simple – terrestrial radio stations pay NOTHING. Why then must satellite and internet providers pay – and pay so much as to destroy their business model? Why would the RIAA and SoundExchange push for rates so high that they would effectively shutter an entire revenue source for the very people they are supposed to collect revenue for?

Simple – they do not want any digital distribution of music.

Internet radio is being punished for their method of broadcasting – because their method is relatively similar to the method of distribution (MP3 files exchanged over peer-to-peer networks) that has been the target of such ire from the RIAA. They are being taxed by the government and the RIAA to make amends for the damage caused by file sharing. Of course this is simply my opinion – but show me a better argument for the behavior of the RIAA and congress.

Congress believes they are protecting the rights of the artists – that is the bill of goods they’ve been sold. If the artists needed protection why not charge terrestrial radio? The reality is they are protecting the business model of the large corporate labels – this has nothing to do with the artists. If it did there would be a single fair rate applied to every method of broadcast.

So here we are… watching a government granted trust destroy an entire industry. What are YOU going to do about it?

Club E Network planning an AZ business incubator.

Good news for AZ entrepreneurs. I’m of the opinion that there is far more talent in AZ and Phoenix in particular than we get credit for. Being a 12 year Silicon Valley veteran I’ve seen the talent in both locations, and while there is little doubt that the talent in SV is far more start-up inclined I think that is – in large part – due to the availability of resources – capital in particular. The result is that in SV everyone thinks they can form a startup… in AZ very few will even give it a shot.

For those of us in AZ bootstrapping a start up is the only practical option – any option for early capital usually comes with onerous strings attached – such as the acquisition of a large share of ownership by the VC/Angel or the proviso that the company re-locate to (you guessed it) Silicon Valley.

This causes two things we can not have:

  1. Potential entrepreneurs leave AZ for SV because “that is where you have to be to start a tech company”.
  2. Once an entrepreneur has an idea the act of seeking the initial capital to make the idea reality will often lead them out of AZ.

I have been lucky enough to have the means to provide my own initial capital investments in cosinity (bootstrapping the initial phase), but I too will soon be beginning a search for capital in earnest… I sincerely hope it does not cause me to leave AZ with my startup.

More resources like the one below will hopefully begin to reverse the trend.

The Club E Network, the entrepreneurs organization founded by Michael Gerber and Peter Burns, is planning to open a business incubator that would provide small-business owners with work space, office equipment, business services and other resources.

The Entrepreneur Factory, or eFactory, would also serve as Club E’s headquarters. The organization is currently scoping out potential locations, according to a post on Club E’s site.

Club E has expanded significantly since its founding in early 2007. The organization has multiple chapters in the Valley and in Austin, Denver and Washington, D.C.

The chapters meet monthly and are open to students and experienced business owners.

[From Entrepreneur network planning a business incubator]

Just because someone miss-uses something doesn’t make it bad…

Articles like this make me nervous:

VoIP scam bilking Islanders – from CBC News

Caller ID unreliable

Caller ID on your phone will not help you identify the origin of the caller, said MacLean.

“In some cases, these fraudsters will actually use spoof legitimate-looking numbers,” he said.

“On your caller ID it may appear that there is a legitimate number on there, but it could actually be a totally different number from a totally different place.”

Once the information is stolen, charges can start appearing on your credit card overnight, and you may not find out until you get your next statement. MacLean said several Islanders have already been cheated out of thousands of dollars.

Let’s get realistic here. It isn’t that caller id is unreliable, or even that “spoofing” caller id is inherently bad… it is simply that criminals used caller id and “spoofing” to scam people into doing something they should NEVER DO:

In this latest scheme, when you answer the phone, an automated voice claims to be calling from your bank or credit card company. An offer is made to reduce bank fees or consolidate debts, or the recording might claim to be an alert over a problem with your card.

Then it asks you to punch in your bank or credit card number on the phone.

Needless to say I do not approve of scam artists using caller id as a tool to create confidence in their targets – any more than I approve when they use sweepstakes schemes or any other such misleading tactic. The solution is NOT to outlaw caller id spoofing, sweepstakes or speaking (in the case of slick talking telemarketers that swindle your grandmother out of her life savings). The solution is to outlaw the swindle, scam and fraud.

To be completely transparent, both page2call and callRecord (our communications applications from cosinity) spoof caller id. We do if for a perfectly respectable reason – individuals and small businesses purchase our services to make (and receive) phone calls on their behalf. Who would want page2call if we couldn’t set the caller id to be the phone number for their business?

We are not misleading people, we are providing valuable services – as will many other companies – which use caller id “spoofing”.

Politics and Innovation

So where do the candidates for President stand on technology and innovation? I’ve reviewed each major candidates site to find their views regarding technology and innovation. You can find each candidate’s page below.

John McCain

Mitt Romney

Barack Obama

Hillary Clinton

I believe these issues are central to both the health of our economy and our country. As you consider who you will support please take the time to understand each candidate’s stand on these issues.

My opinion:

The republican candidates fail to address any of the legislative and regulatory issues that serve to enhance or inhibit our country’s ability to compete in an information economy. I find this lack of attention to these matters both startling and indicative of a fundamental misunderstanding of the issues facing the United States and it’s citizens in the next 20 years.

The republican candidates only concern seems to be protecting us from the highly publicized tiny minority of predatory threats found online.

Both democrats seem intent on addressing the issue, however their approach is different in both kind and degree. Clinton focuses on the tried and true issues without venturing into the specific issues which will effect change.

Only Obama addresses any subset of the real issues we face. While I may not agree with all of his positions – or even the relative priority of those positions – he is the only candidate that expresses any real understanding of the issues which will enhance or hinder this country’s ability to compete in a global economy and continue to maintain our lead in invention and innovation.

Verizon targets Fixed VoIP Services

Jeff Pulver gives us his thoughts on Verizon’s continued patent assault on VoIP providers.

This case against Cox is significant because rather than seeking the same win it got from Vonage from other similarly situated companies, Verizon is now seeking to expand the breadth of its winning patent portfolio to fixed VoIP. To the extent that Verizon wins here, this could have broad implications for other fixed services using DOCSIS (as Cox and the rest of the cable industry generally use), presumably other fixed VoIP that doesn’t use DOCSIS, and depending on which if any patents are upheld – to VoIP billing systems, routing systems, network management, and other technologies. So while this is the first major suit against a fixed VoIP services, my quick read of the patents suggests that only in a few cases (like the 930 patent) are the patents limited to fixed functionality. Among analysts, there is still speculation as to why Verizon chose to go after Cox cable instead of a cable company like Comcast who presumably uses the same technology, shares a greater competition footprint, and has a larger number of customers.

Jeff’s post contains links to the suit and each disputed patent.

This activity continues to stifle adoption and investment in VoIP services in the US – with the net effect that only the legacy fixed line carriers (with their patent arsenals) are able to effectively able to offer these services. That being said – they have little or no profit motive in innovating voice communications – after all their revenue is generated from fixed PSTN service.

One of the key differences as TeleGeography points out is that in Europe, incumbent service providers have had to compete against VoIP providers and now themselves account for 26% of VoIP subscribers, while in the US incumbents have remained largely on the sidelines in terms of VoIP.

This is – in my opinion – another attempt to shield a business model using legislation. Verizon is not trying to protect their VoIP offering (business model) by enforcing these patents… they are protecting their existing fixed line business model.

Instead of embracing innovation and using their patents to develop superior offerings – and winning in the marketplace – they are using their patents as blunt instruments to blunt the effect of innovation.

The bad news is that Verizon can not – long term – win this battle. All they will do is force the innovation to locales outside the influence of the US patent system. Verizon is doing VoIP providers in Europe and Asia a huge favor and the US consumer a huge disservice.

NY Times public Copyright debate.

The New York times is running a series this week which will feature a public debate regarding the necessity of copy protection:

This week, Bits will host a debate about copyright issues and technology between Rick Cotton, the general counsel of NBC Universal, and Tim Wu, a professor at Columbia Law School. See the entire debate here.

Anyone interested in this debate should be sure to follow the public debate this week here.

More after the jump…

Continue reading “NY Times public Copyright debate.”