The Big Story: Net neutrality revival set to ensure level startup playing field
The Federal Communications Commission (FCC) voted on Thursday to restore net neutrality rules that prevent Internet service providers (ISPs) from engaging in blocking, throttling, paid prioritization or otherwise slowing access to certain websites or services. The rules passed along partisan lines, and Congressional Republicans and ISPs expressed strong opposition. For startups, the move ensures the Internet remains a level playing field for all, so they don’t have to worry about outbidding large incumbents for better access to users.
The FCC’s restoration of net neutrality is substantively similar to the Obama-era open Internet rules adopted in 2015, which were repealed in 2017 under then-Chair Ajit Pai. As part of the rulemaking process that kicked off last year, the FCC received 40,000 comments. Engine underscored the importance of net neutrality to the startup ecosystem in our submission, stressing that “the hundreds of thousands of new startups that launch every year simply do not have even a fraction of the resources or time required to engage in negotiations with ISPs or pay for the priority access that their well-financed incumbents would be able to afford.”
Congressional Republicans are set to hear testimony from the commissioners early next month, and the telecom industry has indicated that they will challenge them in court. That challenge is likely to fail because the substantively similar 2015 rules were upheld by the DC Circuit Court of Appeals. We applaud the FCC’s vote to reinstate net neutrality rules, ensuring that all startups, regardless of size or resources, have equal access to a free and open Internet, promoting innovation and competition.
Policy Roundup:
The Federal Trade Commission votes to ban noncompete agreements. On Tuesday, the Federal Trade Commission voted 3-2 to ban noncompete agreements nationwide, which could free up talent in the innovation ecosystem. The rule prohibits new noncompete agreements from being enforced for all workers and invalidates existing agreements, except for those with senior executives. Engine has repeatedly underscored the harmful impacts of restrictive non-compete agreements on the innovation ecosystem, hindering startups’ ability to hire needed talent and preventing would-be founders from launching companies. The rule is set to go into effect 120 days after it is published in the Federal Register, and policymakers should continue the momentum by passing legislation permanently banning noncompetes nationwide, like the Workforce Mobility Act.
President Biden signs TikTok ‘ban’ and data broker bills into law. On Wednesday, President Biden signed a foreign aid package that included a bill designed to force a sale or ban TikTok in the U.S. and another restricting data transfers to foreign adversaries. Public interest groups said the TikTok bill is unconstitutional because it violates Americans’ First Amendment rights. The company said it would challenge the law in court.
Sweeping AI bill passes Connecticut Senate. The Connecticut Senate passed an expansive bill this week that would create an elaborate AI regulatory framework that threatens to burden AI innovation in the state. If enacted, it would be the first state to put in place broad AI rules, setting the stage for another patchwork of burdensome, varying state rules for startups to navigate. The bill now moves to the House, where it is unclear if it will be passed before the state’s legislature adjourns on May 8th. The Governor, a former entrepreneur, has also expressed concern about how getting regulation wrong could “stymie innovation.”
Biden Administration considers immigration relief for spouses of U.S. citizens. The White House is considering granting temporary legal status and work permits to immigrants in the U.S. unlawfully that are married to American citizens. The administration is reported to also have explored implementing "parole in place" for spouses of U.S. citizens which would grant them temporary status, along with permits and a potential pathway to citizenship, although no concrete actions have been finalized yet. Engine has repeatedly called for policymakers to broaden pathways for foreign talent to settle in the U.S. to strengthen our talent pool and welcome new, innovative startup founders, boosting our startup ecosystem.
Startup Roundup:
#StartupsEverywhere: San Antonio, Texas. José Padilla has an established track record of providing efficient, low-cost legal services. With LegalMente AI, he’s able to provide that same quality of work to those in need, including early-stage startups. We sat down with him to talk about what policymakers need to know about the uses of AI, how to keep the U.S. innovation ecosystem the most competitive globally, and his motivation to provide the most efficient work possible.
