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App-Makers Seek K Street Assistance

It took Calgary Scientific Inc. only two months to win Canadian government approval for a new mobile application that allows doctors to analyze MRIs and other complex medical images on an iPad from anywhere in the world.

But when the same product came up for a review in the U.S., regulators focused on the obstacles to viewing such images on a mobile screen. Two years passed before the company got the green light.

Such experiences are persuading Calgary Scientific and other mostly small app developers to turn to K Street for help with product reviews, as well as debates over spectrum allocation, privacy legislation and electronic payments.

Well-established technology trade groups have long handled such work. But with revenue from smartphone and tablet apps expected to reach $38 billion by 2015, according to Forrester Research, mobile-app-makers are increasingly convinced they need a cadre of lobbyists fully devoted to their fast-growing market.

“It’s actually kind of scary [to see] some of the policies that are being pushed in Washington,” said Ahmed Siddiqui, the founder of Go Go Mongo, a nutrition-
focused app for preschoolers that has been downloaded more than 35,000 times since hitting the market just more than a year ago. “We need people that understand apps lobbying for us.”

Backing the app-makers are venture capitalists and operators of platforms on which the apps operate, including Google Inc., Microsoft Corp. and Apple Inc. Microsoft pumped at least $1 million last year into the Association for Competitive Technology, an app-focused trade association.

The introduction of Apple’s iPhone in 2007 has led to nearly 500,000 app-
related jobs in the U.S., according to a recent study by TechNet. The industry is pushing app-friendly policies that could spur further growth through ACT and the Application Developers Alliance, a 3-month-old trade association run by longtime technology industry lobbyist Jon Potter and backed by Google.

“We needed an association which primarily represents the mom-and-pop developers and the platforms who are competing for their time and attention,” said Tim Sparapani, a privacy expert who helped Facebook develop one of the Internet industry’s most robust Washington, D.C., presences. Sparapani joined the ADA as its top lobbyist last week, just days after the organization brought on seven lobbyists from Brownstein Hyatt Farber Schreck.

TechNet, one of several established technology trade groups in Washington, D.C., doesn’t view the activity as a threat.

“There is a huge demand for education of policymakers,” said John Horrigan, vice president for policy research at the organization. “It’s not so much competition from our perspective but more a natural outgrowth of evolving industry.”

ACT was founded by Mike Sax, who developed a landscape keyboard iPhone app that Apple later made standard. The group is flying about 40 application developers to Washington in May for meetings with lawmakers and federal agency officials.

The lobbying trip will be the second for Siddiqui. With a web of privacy proposals in the works on Capitol Hill, he is concerned that lawmakers trying to protect users will inadvertently prohibit companies like his from collecting data necessary to understand how consumers are using the app.

Such concerns have already persuaded Todd Moore, the founder of TMSOFT, a company that has sold millions of its “white noise”-generating apps, to steer clear of programs that collect consumer data.

“I don’t want to get into a situation where I’m spending all my money on legal matters to make sure I’m following all the rules,” he said. “That would just kill this industry.”

He said he would like to see Congress crack down on “patent trolls” who file aggressive intellectual property lawsuits. That’s why his company sits on the board of directors of the ADA.

Calgary Scientific and other companies that develop mobile medical apps occupy one of the thorniest niches in the app world. The Food and Drug Administration last year proposed guidelines to ensure apps used for treatment and diagnoses are held to the same standards as traditional medical devices. Makers must also convince lawmakers that their products protect patient privacy. And they’re monitoring the Federal Communications Commission debate over spectrum allocation to make sure their products have enough bandwidth to work reliably. IBM Corp. estimates annual mobile health app sales will reach $50 billion by 2017.

The FDA last fall approved Calgary Scientific’s ResolutionMD Mobile app for iPhones and iPads. A Mayo Clinic study found the app could reduce the time to diagnose a stroke victim by 11 minutes by transmitting CT scans and MRIs to specialists’ digital devices. The company is trying to expand its use to ultrasound and X-rays.

“I don’t think the actual regulatory process could be changed much for mobile apps without a complete overhaul of the way [the] FDA approves medical devices,” said Kyle Peterson, the company’s director of government and regulatory affairs.

That’s where a lobbyist could come in handy. But, he added, “we are a small company and lobbyists are expensive.”

Indeed, most app developers are too small to retain major K Street firms. They count on the largess of companies such as Apple, Google, Microsoft and Facebook, which seek to make their platforms the preferred destination for application developers to offer the broadest range of products.

Last year, Microsoft gave more to ACT and the Business Software Alliance than any of the 25 other trade associations it supported, according to company documents. ACT is not registered to lobby because it spends less than 20 percent of its roughly $5 million budget on lobbying activity. The group spends most of its funds on workshops and policy briefings for developers.

Google, which declined to comment for this story, sits on the board of the ADA along with Research in Motion Ltd., the makers of BlackBerry. The group declined to provide its budget but said it provides free membership to individual developers thanks to “corporate members whose annual dues range depending on the size and focus of the company,” according to a spokesman.

Legislation earlier this year designed to stop illegal content-sharing online served as a wake-up call to app developers, who, like Internet pioneers a generation ago, were inclined to ignore what goes on in D.C.

“For the first time, policymakers mattered,” Potter said. “It was also the first time app developers mattered to policymakers.”

One of the biggest challenges for these lobbyists will be explaining to Members of Congress what applications actually are and how they differ from traditional forms of software.

“They are very behind in understanding apps,” said Siddiqui, who plans to meet with lawmakers from California and his home state of Minnesota when he comes to Capitol Hill in May. “They are afraid that someone is going to hack into their phone.”

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