The Big Story: Startups watch as Senate considers tech, telecom nominees
This week, the Senate continued to weigh Biden's key picks for a variety of tech leadership roles—including nominees that could support startup formation and help to create a broader innovative environment.
The Senate confirmed Alan Davidson to serve as Assistant Secretary of Commerce for Communications and Information and to head the National Telecommunication Information Administration (NTIA). In this role, Davidson will oversee critical broadband investments, including ones from the recently passed infrastructure bill. Programs from this bill will support startups and their customers with necessary connectivity and infrastructure and help close the digital divide.
After weeks of behind-the-scenes work, on Thursday, the Senate Judiciary Committee voted to advance Kathi Vidal’s nomination to lead the U.S. Patent and Trademark Office (PTO). If confirmed by the full Senate, Vidal would be the second woman in history to fill the position. As we’ve previously stated, she is poised to help create a more equitable and diverse patent system and open opportunities for startup innovation. Indeed, she has demonstrated her commitment to diversity over a decades-long career, and her years representing plaintiffs and defendants in patent disputes can afford her an important perspective needed to bring balance back to the PTO and ensure the interests of high-tech startups are not pushed to the wayside. In contrast to recent PTO policies that fueled abusive litigation and rising costs, Vidal’s confirmation could trigger the agency to refocus on quality and balance, and be responsive to all stakeholders.
While nominations are looking up for certain positions, the Senate remains slow confirming other crucial picks, including FCC nominee Gigi Sohn who will be in a position to support startup priorities if confirmed. Sohn has been a long time advocate for pro-startup policies, including around net neutrality rules, which would keep Internet service providers from being able to charge Internet companies for better and faster access to their users.
Startups are waiting for tech policy leaders who can keep them in mind and commit to creating an environment where they can thrive. We hope that policymakers make swift decisions for the benefit of innovation.
Policy Roundup:
Problematic trademark and e-commerce bill re-emerges. Some lawmakers are reportedly pushing to add the Stopping Harmful Offers on Platforms by Screening Against Fakes in E-Commerce (SHOP SAFE) Act—a bill that would generate substantial new barriers for e-commerce startups—into the United States Innovation and Competition Act (USICA). USICA—formerly known as Endless Frontiers Act—would bolster innovation and invest in its infrastructure but has already been bogged down and delayed over proposed amendments. Now some lawmakers want to add an unrelated bill that would create a dramatic shift in trademark law and the way online platforms operate, with a particularly disproportionate impact on startups and small businesses. During a hearing on the bill last year, many members of Congress emphasized the bill’s problems and the House Judiciary Committee agreed to fix it before moving on, a fact that reaffirms the bill’s flaws and highlights the problems of trying to wedge it into a large, otherwise-good spending package now.
Senate panel tees up antitrust bill. Earlier this week, the Senate Judiciary Committee noticed markup of S. 2992 the American Innovation and Choice Online Act. The bill, led by antitrust subcommittee Chair Klobuchar (D-Minn.), restricts the conduct of a few large technology companies, but will have broader consequences for the technology sector. As observers have pointed out, the bill will create “costly obligations that these platforms will pass on” to their customers, including startups and smaller companies. The bill is part of a broader set of tech-focused competition proposals in Congress that have raised concerns about their impact on American competitiveness and innovation, and startups remain wary of the consequences the legislative efforts might have for their input costs, their ability to earn investment, and any opportunities for a successful exit.
FTC starts and stops on wide-ranging privacy rules. The Federal Trade Commission is looking to write privacy rules that could impact millions of companies and their business practices, including large parts of the startup ecosystem. The rules would reportedly govern “the data practices of millions of businesses in the U.S.” and open the door to the agency collecting “stiff fines for first time violations.” FTC Chair Lina Khan has faced several obstacles in starting the process, including opposition from the agency’s two Republican Commissioners, who have joined with lawmakers to warn that Congress should take the lead on privacy rules. As the FTC considers privacy rules and several states move quickly on privacy legislation in 2022, Congress should pick up its work on crafting a federal privacy framework that creates strong privacy protections for consumers and consistency and certainty for startups.
New York antitrust re-write advances out of committee. On Wednesday, the Consumer Protection Committee of the New York State Senate advanced an overhaul of the State’s antitrust statutes. The bill—which passed the Senate in the previous session, before dying in the Assembly—was reintroduced at the beginning of this year and, among other things, would impose a premerger notification requirement at 10 percent of the federal threshold. Acquisitions are a critical part of the startup ecosystem, provide opportunities for successful exit, and have a strong, positive correlation with startup investment. Such a low threshold will sweep up and create headwinds for thousands of non-problematic transactions, and the provision will make New York the first state to require notification. New York startups and small businesses are concerned the bill will undermine critical components of the startup ecosystem, and make it tougher to do business in the state.
We’re hosting a conversation for SOPA’s 10th Anniversary. On January 21st at 12 pm ET, we’re hosting a panel for the 10 year anniversary of the defeat of the Stop Online Piracy Act (SOPA). Join us as we examine the ways that existing legal frameworks allow startups to host user-generated content for all kinds of purposes and communities. Register for the event here.
Startup Roundup:
#StartupsEverywhere: Washington, District of Columbia. Pruve Systems is leveraging a variety of emerging technologies, such as artificial intelligence and blockchain, to develop workflow systems that are easy, inclusive, and completely secure. Co-Founder and CEO Thomas Dawson, spoke to us about what led to the founding of Pruve, how it’s important to be inclusive in the development of new technologies, and why policymakers should reframe how we think about the development of tech talent through higher education.
