So long, new deepwater drilling regulations

By Shelley DuBois, reporterAugust 4, 2010: 3:44 PM ET

FORTUNE -- Yesterday, Democrats in the Senate rejected taking up a new oil spill response bill because of a dispute over who foots the costs of future spill cleanups and more importantly, how much those parties -- largely oil and exploration companies -- will pay. The Senate is voting on the bill, vaguely titled "a bill to promote clean energy jobs and oil accountability, and for other purposes" in response to BP (BP)'s spill in the Gulf at the Macondo well.

Other parts of the over 400-page bill about energy in general and offshore drilling in particular include safety measures. Until some version of the bill passes, important issues with offshore drilling will remain caught in legislative limbo.

That's a problem. Oil companies have argued that they have stringent safety policies on offshore rigs, regardless of holes in the regulatory system. Many of them do. But this spill has highlighted the need for more efficient oversight.

This block will slow that. The Senate, according to Politico, is supposed to vote again next month, but there's no sign anything will change in that time to help the bill pass.


The major point of contention was the lifting of the liability cap. Generally, Democrats want to hold companies accountable for spill-related damage over $75 million(See editor's note.) Republicans think that the liability cap should stay, so that spills won't bankrupt oil companies.

0:00 /2:57BP oil spill's silver lining

Either way, the debate is holding up policy that should have been in place long before the spill.
Some examples of actions from the defunct bill that will now live in limbo:

• SEC. 104. OIL AND HAZARDOUS SUBSTANCE RESPONSE PLANNING: This section mandates that the government must have a plan if another spill of this size happens again. The US has never had to deal with a spill of this magnitude, nor has it ever had to intervene at the level it has with the Gulf spill. As a result, it stumbled from strategy to strategy. A well thought-out and well described plan should help in future catastrophes 
• 204. SCIENCE AND TECHNOLOGY ADVICE AND GUIDANCE. A non-government, non-industry group of science and technology experts would weigh in on whether the government's oil spill response plan is adequate.
• SEC. 205. OIL POLLUTION RESEARCH AND DEVELOPMENT: This would allow the Department of the Interior to research ways to clean up oil spilled in the continental shelf and figure out how much damage this spill actually caused. There generally isn't good follow-up to spill damage once the slicks are gone. This would be a welcome change.
• SEC. 626. CERTIFICATE OF INSPECTION REQUIREMENTS: Under this section, floating rigs would have to adhere to the highest safety requirements. The key part of this is regulating blowout preventers - the section demands that all rigs have one that works. Most rigs out there do. Still, given the blow out preventer problems with the Deepwater Horizon, it couldn't hurt to put this requirement more firmly on the books.

For any of these regulations to win passage, both political parties will have to agree about how much to charge companies that spill, with Republicans seeking to limit damages for future spills. Otherwise, other important parts of deepwater drilling regulation will be bereft of a much-needed update.

Editor's note: Due to an editing error the damage cap was reported as $75 billion. It is $75 million. 
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Web Startups: Tips For Raising Money

Great products, teams and business models are still most important.

As the market continues to recover from the 2008 dive and subsequent fallout, many investors are understandably jittery about throwing money at early-stage companies and have instead opted to join less risky rounds for more mature startups.

But for young startups with solid Web products, there's a silver lining: Statistics are showing slightly better numbers for seed and early-stage deals at Web startups than for startups in other verticals.

Have a killer product. Product is still the most important consideration when you're trying to raise capital.
Being the original is trumped by being the best, and sometimes--just sometimes--having an intriguing product is better than making money right out of the gate. One of social media's biggest startup success stories in recent years is Twitter, which without a doubt has turned out to be a killer product, one that the Twitter team focused on to the exclusion of almost every other business consideration, including revenue.

Most importantly, having a killer product is one of the few things that will help you raise money in the face of stiff and ever-increasing competition. In the current tech ecosystem, a clone is born every minute, but fighting off your competitors won't help you as much as looking inward and building the absolute best product you can.

Examples:
--TweetPhoto's Series A: This startup had competitors in spades--and popular, well-entrenched ones, too. But that didn't detract from its focus. When I spoke with the founders at Chirp, creators of TweetPhoto, they displayed single-minded confidence in their product; they believed that what they were building was better than anything else on the market. And they were able to convince investors that this was the case, as well.

 --Foursquare's Series B: Foursquare's core offering--a mobile check-in application--has seen iteration after iteration over the past year or so. As a result, the application has gone from being a spin-off, nerd-centric game to a potentially scalable location and marketing application.

--Collecta's Series B: The folks on this team were facing some serious competition last year, and not just in the company's vertical of real-time Web search. When Google ( GOOG - news - people ) and Microsoft ( MSFT - news - people ) simultaneously announced they'd be entering the real-time search market, the startups on that scene were definitely shaken. But Collecta focused on creating more value, more relevant results and a better algorithm, and investors rewarded that dedication.

Have a killer team. Quora, Brizzly, SimpleGeo and Square have all gotten funding over the past year, and it would be fatuous to think that their founders' backgrounds at Facebook, Google, Digg and Twitter had nothing to do with those deals. We suspect that the access to high-quality networks of investors, which generally comes along with working at one of the larger tech companies, helps in securing funding. But also, having been an important part of a world-famous and innovative team proves a lot to would-be investors. And look at Internet phenom Ze Frank; the meme master got $500,000 in seed money for his stealth social gaming startup.

But a "killer team" doesn't necessarily mean all-star tech pedigrees and Internet fame. Investors are looking for, to put it plainly, good people who are intelligent in their disciplines and flexible in how they see the product.

As VC Sumeet Jain of CMEA Capital wrote to us, "If we can't think of a better team, we're excited ... Seed and Series A companies can pivot several times, and the company at the end of several years of development can be radically different than what was first envisioned. The bet, therefore, has to be on the team to a much greater degree than any one idea or business."

Examples:
--SimpleGeo's Series A: Matt Galligan was the boy genius behind SocialThing, a product of the TechStars program and an AOL acquisition in its early stages. Joe Stump was the chief architect of Digg. When Galligan told us last year that they were working together on a social, location-based startup, his passion for the project was on par with his team's expertise. Funding a team like that was a safe bet.

--Quora's Series A: Facebook's engineers are reportedly some of the best in Silicon Valley. So when a few of Facebook's early hires--including the company's CTO, Adam D'Angelo--bolted to start something new, investors were certain that whatever came out of the company would be scalable and beautifully coded.

--Square's $10M Series A: It's true that investors love apps dealing with shopping and finance, but what jump-started Square's success early on was the big-name appeal of its CEO, Jack Dorsey. As a Twitter co-founder, Dorsey carried that most elusive of Silicon Valley trophies: mass adoption. Dorsey's cachet undoubtedly helped Square secure its atypically large Series A.

Have a killer business model and revenue opportunities. While we've seen a few examples of new apps getting funded as the founders steadfastly refuse to focus on revenue during formative product-development stages, we're seeing many more deals being made around apps that show solid, money-making potential out of the gate.

The technology market may boom and bust, the global financial market may crash and recover, but VCs will never get tired of companies that can make money.

Even if the tech world is full of bigger competitors than your company, your startup still has a chance at raising money (and at longer-term success) when there's a proven revenue model and enough customers, users and revenue to go around.

Examples:
--Shopkick's $15M Series B: Shopping and location apps are among the hottest for investors right now, and it's easy to see why. They connect to a direct revenue pipeline (advertising dollars for marketing campaigns and, depending on how the app is executed, user dollars for special features) and a huge amount of pursuant data on how, where and when people spend money. Shopkick is capitalizing on both trends at once and is primed to snag consumer and brand attention and cash.

--Blip.tv's $10M Series C: Blip.tv did revenue the old-fashioned way: It asked users to pay for their service. And although YouTube, which has chronically struggled to turn a profit, has proved to be the Goliath of the online video world, Blip.tv and a handful of scrappy video startups have fared well through offering clever partnerships and freemium benefits.

--LivingSocial's Series C: LivingSocial is competing with Groupon, the large and fairly well-known bargain-hunters' app. But when it comes to this market and this economy, there's enough room for more than a few smart-shopping sites and applications. By linking their product directly to consumers' buying habits and creating a built-in opportunity to partner with large brands and small local businesses alike, LivingSocial crafted an attractive investment opportunity.

Jolie O'Dell is a technology and social media journalist for Mashable.

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Computing at the Speed of Light

Replacing metal wiring with fiber optics could change everything from supercomputers to laptops.

By Tom Simonite

The world of computing could change rapidly in coming years thanks to technology that replaces the metal wiring between components with faster, more efficient fiber-optic links.

Seeing the light: A chip in the center of this circuit board contains four lasers that convert electrical signals into light pulses. The pulses travel at high speeds along a fiber-optic link. Credit: Intel

"All communications over long distance are driven by lasers, but you've never had it inside devices," says Mario Paniccia, director of Intel's photonics lab in Santa Clara, CA. "Our new integrated optical link makes that possible."

Paniccia's team has perfected tiny silicon chips capable of encoding and decoding laser signals sent via fiber optics. Today, when data arrives at a computer via a fiber optic connection it has to be moved from a separate photonic device to an electronic circuit. This new system promises to speed things up because everything works in silicon.

Last week, Paniccia's team demonstrated the first complete photonic communications system made from components fully integrated into silicon chips. Electronic data piped into one chip is converted into laser light that travels down an optical fiber and is transferred back into electrical signals a few fractions of a second later. The system can carry data at a rate of 50 gigabytes per second, enough to transfer a full-length HD movie in less than a second.

The silicon photonic chips could replace the electronic connections between a computer's key components, such as its processors and memory. Copper wiring used today can carry data signals at little more than 10 gigabytes per second. That means critical components like the central processing unit and the memory in a server cannot be too far apart, which restricts how computers can be built.

The new Intel setup has four lasers built into its transmitter chip that shine data into a single optical fiber at slightly different wavelengths, or "colors." Chips with even more lasers should make it possible to communicate at 1,000 gigabytes per second, or one terabit per second.

"Having a chip the size of your fingernail that can deliver a terabit per second changes the way you can think about design," says Paniccia. Such chips could make a big difference inside the sprawling data centers operated at great expense by Web giants like Google, Microsoft, and Facebook. "Data centers today are big piles of copper--that imposes the limits on how you arrange components inside a server," Paniccia says.

 "If I could just move the memory a foot away [from the processors], I could add a whole board of memory for a single CPU instead," says Paniccia, whose team is experimenting with prototype servers to work out how to build them with photonics links inside.

Moving a server's memory away from the CPUs would also make ventilating them easier. Since roughly half the cost of running a data center, used for everything from services like Facebook to banking records, comes from cooling, that could have a significant impact.

Further savings may come from the fact that optical links require less power to operate, says Keren Bergman, who leads a silicon photonics research group at Columbia University. "With electrical wires, the longer you go, the more energy you spend in an exponential fashion," she says. Optical fiber allows low-power signals to travel farther faster. Bergman's group has used data on the performance of computers at Lawrence Berkeley and MIT's Lincoln Laboratories to simulate how systems with optical interconnects might perform. "You can get an order of magnitude gain in energy efficiency," she says, with the largest gains seen for applications such as high-bandwidth image processing and video streaming, she says.

Data centers aren't the only things that may see their insides lit up with lasers. "We've developed this technology to be low-cost so we can take it everywhere, not just into high-performance computing or the data center," says Paniccia. The components of the Intel system, including the lasers, are made with the same silicon-sculpting methods used to construct computer chips in vast quantities. "I'm drafting Moore's law," says Paniccia. "We've enabled the benefits of using light with the low-cost, high-volume, scalability of silicon."In consumer computers like laptops, that would allow innovations in industrial design. I could put the memory in the display instead, and change the design of the whole thing."

This could make it easier to swap in new components without having to open up a machine. It would also allow core components to be installed in peripherals. Extra memory could, for example, be hidden in a laptop or smart phone dock to increase a portable device's computing power when plugged in.

Fully exploiting the benefits of the optical age will, however, means changes to the components being linked up. "It's not just a case of whip out the electrical wires and replace them with optical fiber," says Bergman.
Ajay Joshi, an assistant professor at Boston University, who is also exploring design options for high-performance computers with optical interconnects, agrees. "If we speed up the channel between logic [processors] and memory, we need to rethink the way you design that memory."

The speed gap between processors and optical links is smaller, but ultimately, that too will likely change. "It would be nice to also see processors that work optically instead of electronically," Joshi says.