The Big Story: Startups watch as Congress considers tech nominees
This week, Senate committees weighed in on several individuals President Joe Biden nominated to key tech leadership roles, shedding some light on the direction the nominees might take to support startup innovators. In a series of hearings, Senators considered acting Federal Communications Commission (FCC) Chair Jessica Rosenworcel and FCC nominee Gigi Sohn, as well as Alan Davidson, who was nominated to lead the National Telecommunications and Information Administration (NTIA), Federal Trade Commission nominee Alvaro Bedoya, and Kathi Vidal, who was nominated to lead the Patent and Trademark Office. If confirmed, each would play an important role in domestic innovation and could bolster the startup ecosystem.
The Senate Commerce Committee held a hearing on Wednesday with Sohn and Davidson. Sohn, in particular, faced resistance from Senate Republicans who cited concerns over alleged hyperpartisanship. Yet as we explained in a recent blog, these nominations are critical to startups as the FCC and NTIA need to be fully operational to aggressively advance startup priorities, including expanding broadband access and restoring net neutrality protections. The Committee also voted on Rosenworcel’s and Bedoya’s nominations. If confirmed by the full Senate, Rosenworcel would become the first woman to formally Chair the FCC at an important time for, e.g., broadband access and revisiting net neutrality. Bedoya would round out a Democratic majority at the FTC with potential implications for startup acquisitions and federal privacy regulation.
The Judiciary Committee separately took up Kathi Vidal’s nomination to be PTO Director. While the hearing was largely dominated by other nominees, Vidal consistently committed to consulting with stakeholders on potential policy changes. As we noted in an op-ed this week, that stakeholder engagement must include championing all startups, reversing harmful patent practices, and bringing long-awaited inclusivity and equality to the patent system.
The startup ecosystem deserves leaders who have a proven track record of advancing priorities and initiatives that support startups and innovation.
Policy Roundup:
Texas social media law targeting content moderation blocked. This week, a federal judge blocked Texas’ controversial social media law, which sought to prohibit Internet companies from moderating content based on the user’s “viewpoint.” The law—written to combat alleged anti-conservative bias and enacted by Gov. Greg Abbott in early September—would have prevented companies with more than 50 million users from removing harmful content and created transparency requirements around removals and suspensions. In his ruling, the judge cited Internet companies’ First Amendment protections and rejected arguments that the companies could be forced by the government to carry particular speech.
Canada to proceed with DST, threatens progress. The Canadian government plans to move forward with enacting its digital services tax on Jan 1, 2022, to be imposed if the global tax agreement at the OECD isn’t fully implemented by Jan 1, 2024. In the event the OECD agreement does not enter into force, Canada will be able to retroactively tax digital services upon which startups rely, threatening to increase input costs for startups. Engine joined a letter alongside organizations from across the technology sector urging U.S. policymakers to address Canada’s problematic DST plans.
Partisan feuds dominate Section 230 hearing. Lawmakers on a key House panel held a contentious hearing this week on Section 230, the foundational Internet law that limits Internet companies’ liability for content created by their users whether or not the company moderates user content. As we’ve long stated, Section 230 creates a crucial legal framework for startups that lets them host and moderate a vast amount of user content without worrying about costly lawsuits that could doom smaller companies. And while the hearing demonstrated the various, often conflicting, problems that members of Congress have with how companies moderate content online, we urge all policymakers on both sides of the aisle to recognize that Section 230 boosts competition and enables platforms of all sizes to host and moderate speech.
G7 Future of Tech Forum centers on tech regulation. This week, officials from the G7 nations gathered in London for a two-day summit focused on fostering international cooperation in tech regulation, including antitrust and the UK’s proposal for handling online content. While international cooperation that lowers barriers to trade is productive, startups remain skeptical of efforts that might restrict their ability to complete a successful exit via acquisition, or impose confusing, burdensome rules around hosting user content.
CASE Act implementation pushed to 2022. The Copyright Office is postponing the implementation of the Copyright Alternative in Small-Claims Enforcement (CASE) Act from this month to next year. The law centers on establishing the Copy Claims Board (CCB)—a tribunal inside the Copyright Office, not the judicial system, to resolve allegations of copyright infringement. While the law may have had good intentions, as Engine recently reiterated in comments to the Office, the CCB could create new problems and open doors to abuse of innovators and Internet users. This emphasizes the need for careful implementation that might minimize abuse.
Startup Roundup:
#StartupsEverywhere: Superior, Colorado. Based in Colorado, hobbyDB is an online collectibles database that aims to catalog every collectible in existence. Founder and CEO, Christian Braun, spoke to us about the origins behind the company, how platforms like hobbyDB have responded to market facilitator laws, and the barriers imposed by the U.S. immigration system to the entry of new entrepreneurs.
