New visa proposal to help create the next big thing

A proposal that will make it easier for foreign entrepreneurs in the US to start the next Google or Yahoo will be debated in the new year.

Congressman Jared Polis has proposed a start-up visa to entice "foreigners with good ideas" to stay in the US.

The issue has been gathering steam in Silicon Valley where half of all tech company founders are immigrants, according to Duke University research.

The idea is part of a proposed overhaul of the US immigration system.

"Every day the American economy is losing ground - not to mention high-tech jobs and technologies - to India and China because foreign-born entrepreneurs cannot secure a visa to stay in the US," he said.

Lost opportunity

Eric Diep, who has just turned 22, could be regarded as one entrepreneur who got away.

He came to Silicon Valley as a student like many immigrant founders who have helped start companies such as Google and PayPal.

Mr Diep was one of the first developers to get into social games with his application called Quizzes, initially launched on the social networking site Facebook.

Over a year ago he started to apply for a visa to allow him to carry on working in the Valley, but he soon encountered problems.

"The reason it was so difficult for me was because I dropped out of university and the stipulation for a lot of visas is undergraduate experience. My age also seemed to be an issue for the attorneys

"At the beginning it wasn't the expense in terms of legal fees but the big problem soon became one of distraction. I was trying to spend as much time working on perfecting my product but then I would have to go away and figure out the legalities of applying for the visa," Mr Diep told BBC News.

In the end, Mr Diep decided to base himself in his native Canada and travel back and forth to Silicon Valley.

"The flying is so tiring between the two places and it's expensive. At one point, I had no money left in my bank account but at the last minute money came in and now I feel pretty fortunate that I can still do this.

"It was a pretty close call," he added.

He backs a start-up visa because, for him, being in Silicon Valley is where he needs to be.

"Being there at the time really launched me. I would never have spotted the social gaming opportunity had I not been there."

Visa details

The start-up visa is aimed at streamlining the country's EB-5 visa system which was initially introduced in 1990 to attract foreign capital to the US.

Each year 10,000 EB-5 visas are available but to get one, applicants need to invest $1m and create 10 full-time jobs.

Mr Polis said he wants "a new class of eligibility" with the start-up visa.

It would be granted to foreign entrepreneurs if their business plan attracts either $250,000 from a venture capital operating company that is primarily US based or $100,000 from an angel investor.

They must also show that the business will create five to ten jobs or generate a profit and at least $1m in revenue.

Some of these requirements may well be changed when the bill goes to committee in the new year.

"Immigration reform is a big discussion in Washington," said supporter Brad Feld, who is also a managing director with venture company the Foundry Group.

"We think the start-up visa is an easy thing to talk about and get consensus around in terms of having a positive spin on entrepreneurship and creating jobs."

Job creation

Some critics fear that making it easier for entrepreneurs to set up shop will hurt Americans by taking jobs away from them.

"I feel incredibly strongly that that is a misinterpretation of the proposal," said Eric Ries a venture advisor and author.

"Some people have called those opposed to new immigration reform xenophobes and that is why I think it is important we craft this proposal so it addresses those concerns. This is not a new visa category but reform of an existing but flawed category," he told BBC News.

The proposal's backers say that far from taking away jobs, new jobs will emerge that were never there in the first place.

"If the capital is available for the market, we should jump to bring those people here. Those jobs only get created once the founders get funded. This is a market driven decision," said Dave McClure, an internet entrepreneur, investor and start-up advisor.

YouNoodle is a start-up company founded by two British entrepreneurs. It tracks the start-up sector and said the figures speak for themselves.

"If just ten thousand start-up visas were made available this would mean over 3000 additional new innovative and funded companies would be based in the US every year," said Kirill Makharinsky, YouNoodle co-founder.

"They would generate more than 10,000 jobs on average every year. In the first 10 years that would add up to over 500,000 highly-skilled new jobs

"So the upside is huge and the downside is negligible because no jobs are being taken away from US citizens," Mr Makharinsky told BBC News.

And for Mr McClure, the consequences of not establishing a start-up visa class are obvious.

"We will lose out because we are not being competitive with the rest of the world," he said.

"There are similar programmes in Canada, the UK and Australia. They are all vying for the top entrepreneurs and if we only look at our own citizens, we are only taking 10-20% of the world's talent into consideration here. That would be short-sighted in the extreme."

Chinese proposal to meter internet traffic

China wants to meter all internet traffic that passes through its borders, it has emerged.

The move would require international agreement - but it is being discussed by the United Nations body in charge of internet standards.

It would allow countries which currently receive no payment for use of their lines to generate income.

But an EU cyber security expert has warned the plan could threaten the stability of the entire internet.

Andrea Servida, of the European Commission, told a House of Lords committee that China could have a "hidden agenda" in wanting to monitor data flows.

And, in later comments to BBC News, he suggested technical changes needed to charge everyone for internet traffic flowing through China could undermine the web's founding principle of openness as well as raising security and stability concerns for all net users.

Developing countries

But the International Telecommunications Union (ITU), the UN internet standards body, firmly rejected his claims saying it was "not clear" how introducing tariffs could threaten internet security or stability.

The ITU also stressed that the Chinese proposal did not involve modifying the Border Gateway Protocol (BGP) - one of the core specifications that controls how data flows around the internet - as Mr Servida has alleged.

An ITU spokesman said: "The ITU has no plans to modify the BGP protocol, which is not an ITU-T standard.

"A proposal has been made, and is being studied, to use BGP routers to collect traffic flow data, which could be used, by bilateral agreement, by operators for billing purposes."

The spokesman said discussions about international internet tariffs had been taking place for the past 10 years and the Chinese proposal was one of many ideas of being studied by ITU working parties.

"We would have welcomed EU participation in the discussion and it's regrettable that the UK Parliamentary committee has been misled in this way," added the ITU spokesman.

But Mr Servida said that as far as the European Commission was concerned the Chinese proposal was "ambiguous" about whether it would involve installing BGP routers or modifying the BGP protocol itself.

And he told BBC News the European Commission's concerns were shared by other delegations at the ITU.

He said that because the BGP protocol is an Internet Engineering Task Force standard and not controlled by the ITU "the involvement of ITU in this specific matter is highly questionable and alarming".

"It indicates a clear intention to introduce higher government control of a critical internet function through what may appear to be a purely technological discussion," he added.

'Security roadmap'

The ITU firmly rejected this claim and insisted that it had involved the wider internet industry in its discussions - with several experts being invited to contribute to the most recent talks on introducing tariffs, which took place in Kampala, Uganda, in September this year.

"There have not been any proposals to introduce 'higher government control of a critical internet function'," an ITU spokesman told the BBC.

Mr Servida, who stressed he was speaking in a personal capacity and not on behalf of the European Commission, said it was "certainly worth engaging in a discussion on tariffs for international internet" - but he suggested China could have ulterior motives for wanting to monitor "packets" of data flowing around the internet and that it could "establish a 'de facto' legitimacy for someone to have a closer look at internet data flows".

China's proposal is understood to have the backing of a number of developing countries, who currently have to bear the cost of international internet connections.

At the moment, when countries install internet circuits, they have to choose between a "peer-to-peer" system for connections with other countries, in which no money changes hands but the traffic flow between the two countries balances out, or an asymmetrical system, where they have to pay the full cost of the connection.

It is understood that the Chinese proposal would see countries reaching a commercial agreement when internet connections are established, including possible compensation for traffic flow and number of routes.

Mr Servida, deputy head of unit at the European Commission's Information Society and Media Directorate General, is one of the authors of an EU plan to protect all 27 member states from large scale cyber attacks and disruption, which is expected to come into force some time after 2011.

The Commission is also working on proposals for international standards for internet security and resilience.

Mr Servida said: "Our target is to develop a roadmap for international cooperation on principles and guidelines for security and resilience by the beginning of 2010."

The proposals would be presented to the EU's international partners at the UN-run Internet Governance Forum and elsewhere at the end of next year, he added.

Mr Servida raised his concerns about China earlier this month when he gave evidence to the House of Lords EU home affairs subcommittee, which is investigating cyber-security.

He cast doubt on the idea that is was possible to "take down" the entire global internet, but added: "Regionally you may have strong disruption and that goes for any region."

He also spoke of the need to reach out to nations who "feel they have legitimate grounds to think of the internet as a kind of private garden" and involve them in international cyber security efforts.

China's laws restricting internet access had been brought in to "protect Chinese citizens" and so were hard to argue against, he told the committee, but the country was now working on technical and trade barriers which would be "bad" for all net users.

"Fencing the internet is not going to help anybody," he told the committee.