The Big Story: Biden puts up key tech, telecom nominees
This week, President Biden announced several long-awaited nominations that, if confirmed, will serve key roles in setting technology and telecom policies that impact the startup ecosystem. The president nominated Acting FCC Chair Jessica Rosenworcel to Chair and nominated telecom advocate Gigi Sohn to be FCC commissioner. He also nominated Alan Davidson to lead the National Telecommunications and Information Administration (NTIA) and Kathi Vidal to be the next Director of the U.S. Patent and Trademark Office (USPTO).
The NTIA and FCC handle a wide range of tech and telecom policy issues, including privacy, net neutrality, the management and allocation of spectrum, and efforts to track the availability and accessibility of broadband. Smart policy in those areas is incredibly vital to the startup ecosystem; increased broadband access across the country opens up opportunities for entrepreneurship, unlicensed spectrum has enabled innovation from Bluetooth to Wi-Fi and more, and net neutrality keeps the Internet a level playing field for startups. Biden’s nominees in this space all have a long track record of supporting innovation and startups, and Engine is eager to see them confirmed so they can continue to advance pro-startup policies.
Biden’s nomination of Vidal to be the next USPTO director comes at an important time for an agency that needs to focus on improving patent quality and advancing diversity in innovation—and at a time when recent USPTO policies have contributed to increasing rates of abusive patent assertion and growing litigation costs for startups (and others). Engine congratulates Ms. Vidal, and looks forward to working with her toward an inclusive, diverse, and equitable patent system that allows everyone across the country to innovate and contribute.
Policy Roundup:
Democrats propose pared back reconciliation bill. On Thursday, Democrats revealed plans for a scaled back $1.75 trillion reconciliation package, though its path forward remains uncertain. An expected vote on the bipartisan infrastructure deal was scrapped as members continued to discuss the reconciliation package. While several items—including universal pre-school, child care funding, and funds for a new technology directorate at the National Science Foundation—are expected to be included in the reconciliation deal, others, like paid family leave, have been stripped from the proposal. And though the package price tag does not include the cost of possible new immigration measures, the framework does call for an additional $100 billion to be used to reform the immigration system. Democrats hope to pay for the package through tax increases on corporate profits and wealthy individuals. The framework is also expected to contain a provision to curtail QSBS benefits for certain earners, which could impact startup compensation packages and investment in new businesses.
New coalition to combat standard-essential patent abuse. On Tuesday, Engine joined 28 innovators, small businesses, associations, and other organizations in launching the Save Our Standards coalition, which will urge a balanced approach to standard-essential patents (SEPs) policy and call on lawmakers to stop abusive practices in SEP licensing. Technical standards open doors for innovation by enabling new products and services that work together. Innovators—including startups—need to be able to license the underlying patents on fair and reasonable terms. However, patent holders who declare their patents essential sometimes abuse their market power, hindering competition and innovation that impacts all areas of society.
FTC issues policy statement restricting acquisitions. This week, the Federal Trade Commission (FTC) issued a controversial policy statement concerning its review of (and potential restrictions on) mergers and acquisitions. The new policy is purportedly targeted to anticompetitive mergers. However, as noted in a dissent filed by two FTC Commissioners, it could chill M&A activity more broadly and lower acquisition transaction prices by reducing the number of potential acquirers. As we have repeatedly cautioned, acquisitions are an integral part of the startup ecosystem, and policymakers should be careful to avoid the negative consequences of efforts to restrict them.
G-7 agree on principles for digital trade, data flows. The G-7 reached an agreement last Friday establishing principles to guide digital trade, including cross-border data flows. As we’ve stated in the past, differing or restrictive rules that govern the use and transmission of user data can erect barriers to trade for startups by imposing steep compliance burdens. While the agreement marks a step forward, more work remains to create a digital trade environment conducive to startup growth.
New State Department bureau will handle cyber, digital policy. Secretary of State Antony Blinken announced Wednesday the formation of a new bureau within the State Department to handle cybersecurity and tech-related diplomacy issues. Among the bureau’s responsibilities are issues important to startups looking to operate abroad, like Internet openness and the development of global standards for emerging technologies.
Join us for the final event in our Nuts and Bolts of Encryption series. Join us for the third event in our Nuts and Bolts of Encryption series, on Friday, November 5, 2021, 12pm ET. This event, co-hosted with the Charles Koch Institute, will feature a panel of startups and advocates who can explain how tech companies, especially startups, use encryption to protect their users' data and the conflicting pressures they would face if forced to build in a "backdoor," or intentional vulnerability, into their products and services. Register today.
Startup Roundup:
#StartupsEverywhere: Omaha, Nebraska. Event Vesta is an event discovery and promotion platform founded in Omaha, Neb. working to improve the connectivity between event organizers and attendees. Andrew Prystai, CEO and co-founder, shared with us the origins of the platform, his experience as a tech entrepreneur in the Midwest, and the ways in which existing tech policy frameworks have enabled their team to build a successful platform.
Tell us about the policies impacting your startup. Engine is startups’ voice in government. Help us better understand your priorities and the issues impacting the startup ecosystem by completing our advocacy survey. If you have any questions, contact: ian@engine.is.
A Conversation with Startup Leaders: Expanding Diversity in the Startup Ecosystem. On Friday, Nov. 16th at 12 p.m. ET, Engine will convene a panel to discuss how and why the startup ecosystem must expand diversity within its ranks—from founders to engineers and investors. During this virtual event a panel of startup founders and ecosystem leaders will discuss the challenges that underrepresented founders face and how policymakers can better support their work. This coincides with Engine publishing an assessment of existing challenges and how policymakers can create opportunities to make the startup ecosystem more equitable. You can RSVP here.
