The Big Story: Pandemic underscores the need for broadband boost. Congress voted this week on a $484 billion coronavirus relief package to help support small businesses and Americans who are struggling as a result of the pandemic, but policymakers are already discussing additional legislative measures to bolster the nation’s broadband infrastructure.
The lack of reliable high-speed Internet across large sections of the country has been magnified by the pandemic, with many Americans forced to conduct business and attend classes from their homes as a result of social distancing measures. The Federal Communications Commission, Internet service providers, and lawmakers all renewed calls last month for bipartisan steps to address gaps in the nation’s broadband services that have been exacerbated by the current crisis. President Donald Trump tweeted this week that he plans to pursue additional legislation focused in part on broadband development after the current relief package is signed into law, and lawmakers from both sides of the aisle have also expressed a desire to pass broadband legislation.
The growing reliance on video conferencing platforms and other online tools as a result of stay-at-home orders has underscored the importance of accessible digital services. Startups and Internet companies in particular—many of which offer mobile apps and online services that have filled vital roles during the pandemic—rely on high-speed connectivity to provide their products directly to consumers. Bolstering the nation’s broadband infrastructure will give more Americans necessary Internet access.
Policy Roundup:
Startups still need clarity when it comes to emergency relief. Although the economic relief package that Congress passed this week includes an additional $310 billion for the U.S. Small Business Administration’s Paycheck Protection Program to support small businesses, startups are debating the merits of applying for emergency funding as a result of eligibility and legal liability concerns. As we noted earlier this week, it’s critical for policymakers to address the startup community’s concerns about access to emergency funding in any future coronavirus relief efforts.
VC-backed startups implementing pay cuts. Venture capital-backed firms—many of which remain ineligible for PPP loans as a result of the SBA’s affiliation rule—are not immune to the economic downturn. A new survey found that a growing number of VC-backed startups are implementing cost cutting measures, with CEOs and employees taking pay cuts.
Main Street Lending Program presents obstacles for startups. Midsize startups are concerned that they’ll be ineligible for the Federal Reserve's $600 billion Main Street Lending Program, which is designed to support businesses that need immediate liquidity as a result of the pandemic. The Fed determines loans based on whether or not firms were profitable—or “EBITDA-positive”—last year, but midsized startups may be ineligible for funding under the current formula because they are EBITDA-negative as a result of growth investments. Rep. Anna Eshoo (D-Calif.) led a bipartisan letter signed by 41 House members that urged the Federal Reserve and Treasury Department to modify the program.
Startups leveraging their services to support small businesses. With many small businesses struggling as a result of the COVID-19 outbreak, startups are stepping in to offer free services to help small firms navigate the economic uncertainty. In the latest post in our continuing series on the ways in which startups and entrepreneurs are responding to the pandemic, Engine spoke with two startup founders who are working to give small businesses needed tools and resources to stay afloat.
FCC votes to open up 6 GHz band for unlicensed use. The Federal Communications Commission unanimously voted to open up 1,200 MHz in the 6 GHz band for unlicensed use, a decision that will empower startups to launch the next generation of U.S. tech innovation.
Startup Roundup:
#StartupsEverywhere: Lincoln, Nebraska. Tutorial management platform fyiio is using its patented technology to create user-centric educational guides. By combining video and written guides into templates, the startup is working to ensure that consumers and businesses are getting the most out of their tutorial experiences.
