Beltway Voices: A Conversation With Chairman Steve Chabot

As Chairman of the House Small Business Committee, Steve Chabot (R-Ohio) guides a committee focused on issues affecting Main Street businesses across America.  Working tirelessly as advocates for entrepreneurs, Chairman Chabot and his committee handle a variety of issues including access to capital, healthcare, technology, and international trade – issues that are deeply personal to the more than 36,000 individual app developers and nearly 200 startups the Alliance represents.  Chairman Chabot’s genial “can-do” attitude, coupled with his belief in nurturing small businesses and celebrating the entrepreneurial spirit, are what make him such an effective voice for developers in Congress.

Chabot’s career in public service began in 1985 as a member of the Cincinnati City Council, where he served until 1990 when he was appointed to serve as a commissioner of Hamilton County, Ohio.  In 1994 he was elected to the House of Representatives.  In Congress, in addition to chairing the House Small Business Committee, Chabot serves on the House Foreign Affairs Committee where he works to expand commercial opportunities for American businesses abroad, and the House Judiciary Committee where he has cosponsored legislation to curb harmful patent troll abuses.

As part of our Beltway Voices series, we caught up with Chairman Chabot to discuss an array of issues important to app developers.   

Application Developers Alliance:  The app ecosystem is growing at breakneck speed.  A decade ago the sector did not exist, yet it is estimated to have created nearly one million jobs since 2007, and could generate more than $40 billion in revenue in 2016 alone.  What should Congress do, if anything, to ensure growth in the sector remains robust?  What role will the House Small Business Committee play?

Chairman Chabot:  The app industry is one that didn’t exist a short time ago.  The more government does that gets in the way, the fewer opportunities there are for innovative new products and markets to develop organically. The sharing economy is the perfect example. 1 in 5 Americans has participated in the sharing economy. It’s creating new wealth and providing consumers convenient and affordable access to resources they wouldn’t otherwise have. But what are we seeing happen in response to these innovations? Throughout the country, entrenched regulatory forces are trying to stifle these entrepreneurs. We should be encouraging this type of innovation at every level of government.

The Small Business Committee has and will continue to stand up for the entrepreneur and the innovator at every possible opportunity.  We are moving toward solutions that would reduce the regulatory burden and modernize government by making the regulatory process smarter and more open than ever before. This means more citizens, startups, and businesses can engage in the process, which makes governing more inclusive and less intrusive. 

House Small Business Committee Chairman Steve Chabot (R-OH)

House Small Business Committee Chairman Steve Chabot (R-OH)

Application Developers Alliance:  The barrier for entry for software developers is relatively low today.  App developers can be found in all 50 states, and in fact, most developers are now located somewhere other than California.  What work is being done to create an ecosystem that encourages innovation and entrepreneurship for software developers in rural America and other places that may not be considered tech hotbeds?

Chairman Chabot:  I recently wrote an article for TechCrunch about the rise of entrepreneurial communities. In it, I highlighted the steps local and state officials are taking to support entrepreneurship and innovation. I’m not talking about Silicon Valley or New York, I’m talking about communities between the coasts. Startup communities are forming in places like Cincinnati and Kansas City and even smaller places like Chattanooga.

At the federal level of government, we need to take note of what these local communities are doing and look for ways to support them. We should be working to make capital more accessible by supporting new models of financing, such as peer-to-peer lending. We also need to promote a more flexible, light-touch regulatory environment that embraces disruptive technologies.  And we have to rethink how we utilize public safety net resources. More emphasis should be placed on helping the underserved learn entrepreneurial skills, because these are the building blocks that will create more opportunities. As the adage goes, if you give a man a fish, he’ll eat for a day. Teach a man to fish and he’ll eat for a lifetime. The same philosophy should be applied to our policymaking. Protecting and promoting the spirit of entrepreneurship should be our north star in most every policy decision we make.

As far as rural communities go, this is 21st century America. Every community – urban and rural -- should be capable of offering residents high-speed connectivity.  Access to information and the ability to exchange ideas is the groundwork of innovation. We are committed to making sure we can meet the demand for a high-tech infrastructure in every American community.

Application Developers Alliance:  Patent trolls continue to chill innovation and job growth around the country, wielding overbroad, never-should-have-been-issued patents to extort businesses of all stripes and sizes.  Trolls frequently single out small businesses who often lack the money, time, and legal expertise to defend themselves against frivolous lawsuits. The Innovation Act (H.R. 9), of which you are a cosponsor, would go a long way to curbing abusive trolling if enacted. Improvements, however, could be made to require greater specificity in both court pleadings and demand letters. Do you expect the House of Representatives to pass the Innovation Act?  Will improvements be made to strengthen pleading and demand letter provisions?

Chairman Chabot:  There are a lot of issues that divide us on Capitol Hill, but one that continues to unite members from both sides of the aisle is combatting the rise of patent trolls. Why? Because patent trolls stifle innovation. They are not creating new value or wealth.  They are burdening hard-working people with junk litigation that really amounts to extortion. So, taking on these bad actors is something we as a nation should do to protect the spirit of the entrepreneur.

With regard to court pleadings and demand letters, as the Chairman of the Small Business Committee and a Member of the Judiciary Committee, I continue to explore all available options, because we need to strike the right balance for the sake of our startup community. I’m hopeful we can make progress on it.

Application Developers Alliance:  Software is providing untold societal benefits.  Software innovations are connecting small businesses with consumers in far-flung places, helping users better understand their health and other daily routines, connecting rural Americans with pharmacists hundreds of miles away, and generally reshaping how we live. These conveniences also bring with them the collection of vast troves of data, some of which can be very personal in nature.  There are instances in which lawmakers and other regulatory agencies have called on innovators to limit the data they collect for fear that their software may be breached and the data stolen by bad actors.  App developers know how important sound data stewardship is for the growth of their businesses, and they work hard to balance innovation with the privacy interests of their customers.  Instead of overreacting and running the risk of killing the next big idea in the cradle, what message should Washington send to app developers who create novel and sometimes life altering technologies?

Chairman Chabot:  Government tends to create more problems. Entrepreneurs create solutions. So I’m in favor of letting entrepreneurs do what they do best on these issues.

As far as data goes, the golden rule for developers should be to handle a consumer’s data the same way they’d want their own data to be handled. That may be overly simplistic, but it’s true. If a developer doesn’t put the consumer first – and by extension that means protecting that consumer’s data and informing them of how it’s being used – they won’t be in business very long. The market incentive is there to treat consumers in the right way.

At the federal level, we have to constantly remind ourselves that our approach to any regulatory question should be a light touch. All too often the government comes in like a bull in a china shop. We should let the free enterprise system sort these issues out.

Application Developers Alliance:  In today’s global marketplace many American businesses – including small app startups – are looking abroad for new customers.  What are you doing to make sure small, American app developers can continue to access markets overseas?

Chairman Chabot:  Building bridges to new markets around the globe is critical to the growth of our economy and the future of entrepreneurship. We’ve already seen how technology has made the world more interconnected – providing people of all walks of life access to educational tools, news, and other resources that they wouldn’t otherwise have access to. Building on these successes by lowering trade barriers will allow American entrepreneurs to reach new users in developing markets.  Isn’t the dream of most entrepreneurs to create a product that can be appreciated by the world, and not just a cluster of users in advanced nations? The Small Business Committee is going to continue to be a forum to highlight the successes and challenges facing app developers, and one of those challenges, which I personally view as an opportunity, is removing the barriers that keep American companies from participating in new markets.

Application Developers Alliance:  In today’s software marketplace consumers demand their communications and data remain private.  How can privacy enhancing tools like encryption protect consumers and entrepreneurs?

Chairman Chabot:  At the end of the day, the consumer is king and the long-term survival of any startup relies on happy consumers. So, the market incentive is there for businesses to employ stringent encryption standards to protect consumer data. If the Administration were to force companies to create backdoors in all their products, then those vulnerabilities are accessible not just to the good actors, but to the bad actors as well. So we have to be very thoughtful in how we approach the security challenges we face. 

Be sure to read the entire Beltway Voices series.  We also caught up with Chairman Will Hurd (R-Texas) and Representative Ted Lieu (D-Calif).


Geoff Lane

U.S. Director of Policy and Government Relations