Our Weekly Take on Some of the Biggest Stories in Startup and Tech Policy.
New Options for Stock Options. Startups across the U.S. use stock options to attract and incentivize top talent. But as we’ve written before, the current tax code makes it difficult for employees to exercise those options, requiring employees to pay taxes on their options even when there’s no public market to sell them to cover the tax burden. On Tuesday, Senators Dean Heller (R-NV) and Mark Warner (D-VA) and Representative Erik Paulsen (R-MN) introduced a bill aimed at remedying this. The Empowering Employees through Stock Ownership Act (S. 3152) would defer an employee’s tax obligations for up to seven years after exercising their stock options, as long as the company offers options to at least 80 percent of its workforce and the employee meets certain eligibility requirements.
Privacy Shield a Done Deal. The EU-U.S. Privacy Shield has finally been approved, and that’s great news for startups. The European Commission formally adopted the agreement on Tuesday, almost nine months after the original “Safe Harbor” data transfer pact was invalidated by the European Court of Justice. The new agreement provides the legal framework for U.S. companies to transfer EU customer data across the Atlantic and provides new safeguards for European citizens to challenge potential privacy violations. “The approval of this revised trans-Atlantic data-transfer framework brings much needed certainty for American startups with European users,” said Engine Executive Director Evan Engstrom following the EU’s final sign-off. Read our full statement here.
Broadband Caucus Launches. Earlier this week, U.S. Senators Shelley Moore Capito (R-WV.), Angus King (I-ME), Amy Klobuchar (D-MN), Heidi Heitkamp (D-ND) and John Boozman (R-AR) announced the creation of the Senate Broadband Caucus to “focus on strengthening broadband infrastructure and deployment across the country.” Engine is excited to partner with the new caucus to explore bipartisan policy solutions that will promote improved connectivity.. Engine Executive Director Evan Engstrom said in a statement, “Meaningful broadband access and affordability are essential to a vibrant entrepreneurial ecosystem. Startups rely on broadband to connect with users, develop innovative products and services, and run their daily operations. Access to quality broadband can also save startups an average of $16,000 per year, which is a significant amount for a company trying to get off the ground. With millions of Americans still offline, federal policymakers should be doing all that they can to connect this huge pool of potential users and founders to all of the opportunities that high speed Internet offers.”
And Another Caucus. The House also saw a new caucus launch this week. On Wednesday, a bipartisan group of 25 members announced the creation of the Fourth Amendment Caucus, led by co-chairs U.S. Reps. Zoe Lofgren (D-CA) and Ted Poe (R-TX), to protect the privacy and security of Americans in the digital age. For the tech community, this is a welcome development. In recent months, the federal government has been considering legislation that would allow federal law enforcement to circumvent Fourth Amendment protections and demand Americans’ personal information using warrantless National Security Letters with little oversight or accountability. In addition, lawmakers have been considering proposals that would require tech companies and developers to install backdoors into encrypted products, despite the implications for consumer privacy rights and the devastating impact weakened encryption would have on US businesses (and startups, especially). The caucus opposes both of these policies, and we hope that this newly formalized group of allies in Congress can continue preventing harmful proposals like these from becoming reality.
Tech Mobilizes Against Donald Trump. A group of 145 technology sector leaders banded together on Thursday to oppose Donald Trump’s candidacy. In an open letter published, the group concludes that “Trump would be a disaster for innovation.” Specifically, the letter slams Trump’s open hostility to immigration, his general “ignorance about how technology works,” and his “reckless disregard for our legal and political institutions” as reasons why a Trump presidency would be harmful to the success of America’s innovation economy. In our own analysis of the candidates, Engine gave Trump a failing grade for his positions (or lack thereof) on tech issues. We still haven’t seen a detailed tech agenda from the Trump campaign, but if this week’s letter is any indication, we don’t expect the broader tech community to support his candidacy any time soon.
Investing in the Internet of Tomorrow. The 5G future is coming faster than we think, and policymakers need to prepare by championing forward-looking policies that enable this next generation of wireless innovation. That’s what Evan argued in an op-ed The Hill. highlighting the growing Internet of Things as a sector with incredible promise, but whose success will depend on having the infrastructure in place to support the bandwidth and speeds it demands. Fortunately, it seems like the Federal Communications Commission (FCC) has been listening. Chairman Wheeler made a speech last month detailing his plan for the future of 5G, and the Commission voted this week to open up huge swaths of high-frequency spectrum to facilitate the deployment of next-gen 5G technologies. In addition, the FCC is in the process of considering reforms to introduce more competition in the business data services (BDS) marketplace, which Evan highlights as “a key piece of powering this rapid technological revolution.” Read the full op-ed here.
Tech Helping Tech Address Lack of Diversity. new group of startups and organizations have cropped up over the past several years to help Silicon Valley address its lack of diversity. Fast Company highlights a number of new companies that are providing tech firms with tools, services, and advising to attract and retain more diverse employees. Recruiting services, including Blendoor, Interviewing.io and GapJumpers help companies find candidates through blind or skills-based matching and interviewing. Another company, Textio, creates job descriptions that are deliberately designed to attract a more diverse array of candidates. It's too soon to tell whether these new services will make a significant difference, but at this point, a plethora of possible solutions can only be a good thing.
