The Big Story: FCC takes next step on Trump’s social media executive order. A federal agency this week moved ahead with a petition from the Trump administration that could open up liability for companies that host user content. Federal Communications Commission Chairman Ajit Pai said on Monday that the agency will receive public comments in response to President Donald Trump’s May executive order on “preventing online censorship” that pushes federal agencies to clarify the meaning of “good faith” content moderation under the law.
The request for public feedback comes after the Trump administration petitioned the FCC last week to review Section 230 of the Communications Decency Act, the law that provides liability limitations to companies of all sizes that host and moderate user-generated content. The petition requests that the FCC consider, among other things, when online platforms should qualify for Section 230 protections, and came in response to Twitter’s efforts to fact-check and append warning labels to President Trump’s tweets.
The U.S. startup community would be disproportionately impacted by major changes to Section 230. Moderating users’ content is a difficult task for even the largest tech firms, and undermining this bedrock Internet law—largely on politically-motivated grounds—would open nascent startups up to crippling lawsuits. And removing these protections could allow legal but objectionable—harmful, offensive, or simply irrelevant—content to proliferate online, further harming startups that cater to niche audiences in an attempt to compete with more established competitors.
Also this week, the White House withdrew FCC Republican Commissioner Mike O'Rielly's nomination for another term at the agency, reportedly because of his lack of enthusiasm for the administration’s attempt to have the FCC review Section 230. Sen. Ron Wyden (D-Ore.)—one of the original architects of Section 230 in 1996—called President Trump’s handling of the FCC review of Section 230 “a disaster” and expressed concern that the White House was using fealty to the president as a cudgel to “turn the FCC into a forum that unravels Section 230.”
Instead of moving to curtail a foundational Internet law that has led to more opportunities for competition and expression online, the administration should recognize the value of Section 230, especially to U.S. startups as they innovate and grow in an increasingly digital setting. If you’re a startup interested in working with Engine to comment on the petition in front of the FCC, please reach out to us at info@engine.is.
Policy Roundup:
U.S. firms must still honor invalidated Privacy Shield pact. Federal Trade Commission Chairman Joseph Simons said during a Senate Commerce Committee hearing this week that U.S. firms must still abide by the now-invalidated EU-U.S. Privacy Shield agreement. The European Court of Justice’s decision last month to strike down Privacy Shield—a transatlantic data transfer pact that allowed U.S. firms to process and store European users’ data in America—is already forcing a growing number of companies to proactively store EU user data in the bloc due to compliance concerns. As we previously noted, U.S. startups are likely to be the most affected by the ruling. If you’re a startup that has been impacted by the decision to strike down Privacy Shield, please contact us here.
Policymakers evaluating responses to claims of anti-competitive practices by big tech. Following last week’s House antitrust hearing with the CEOs of Amazon, Apple, Google, and Facebook, policymakers are continuing to evaluate their response to claims of anti-competitive practices by big tech firms. Lawmakers told Axios that they are discussing taking some combination of updating antitrust laws for the digital ecosystem and pushing for some of the largest companies to be broken up. Earlier this week, lawmakers in New York also introduced legislation—Senate Bill S8700A—that would make it easier for people to sue large tech firms over their alleged anti-competitive practices by authorizing class action lawsuits under the state’s antitrust law.
ITIF report finds no correlation between industry concentration and startup creation. Despite U.S. policymakers pushing to address claims that large firms are suppressing competition, a report released by the Information Technology & Innovation Foundation this week that examined allegations that market consolidation is harming U.S. startups found that “there is no statistical relationship” between startup creation and the change in concentration by industry.
DOJ moves to block California net neutrality law. The Department of Justice asked a federal judge this week to block California’s net neutrality law, which would reinstate the net neutrality rules that were repealed by the Federal Communications Commission in 2017. The FCC’s 2015 Open Internet Order helped keep the Internet a level playing field by requiring Internet Service Providers to treat all lawful Internet traffic the same. The Justice Department filed a lawsuit in 2018 after California passed a law reinstating the net neutrality protections at the state level, but the state agreed to hold off on enforcing the mandate until a U.S. appeals court ruled on the FCC’s repeal of the rules last year.
Senators introduce bill to support broadband access for underserved communities. This week, Sens. Tim Scott (R-S.C.) and Roger Wicker (R-Miss.) introduced legislation—the Connecting Minority Communities Act—to bolster broadband access and development in rural and underserved communities across the country. The bill would codify the National Telecommunications and Information Administration’s Minority Broadband Initiative and create a Connected Minority Communities Pilot Program to provide $100 million in grants for historically Black colleges and universities, tribal colleges and universities, and Hispanic-serving institutions to purchase broadband services and equipment.
States rushing to expand broadband access before the end of the year. State officials are pushing to complete broadband projects by the end of the year in order to comply with provisions in the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The $2.2 trillion CASE Act included $1.5 billion to help communities impacted by the COVID-19 outbreak deploy broadband, but those funds carry a requirement that broadband projects be operational by Dec. 30th.
Startup Roundup:
#StartupsEverywhere: Raleigh, North Carolina. Launching a startup is hard, but Big Pixel—a strategic design and development firm based in Raleigh—is hoping to give founders the resources and support they need to succeed. We spoke with David Baxter, Big Pixel’s Founder, to learn more about his company’s work, the Raleigh startup ecosystem, and what policymakers can do to further support startup success.
High-tech startups, jobs increasing all across the U.S. A recent study released by the Information Technology Industry Council shows the potential for high-tech startups and jobs to continue growing and expanding outside of traditional U.S. tech sectors. The study found in part that the average congressional district has approximately 400 high tech startups that employ roughly 3,400 workers.
