The Big Story: Net neutrality back in the spotlight as DOJ drops California suit. The U.S. Department of Justice this week dropped its challenge to California’s 2018 net neutrality law, removing one of the major roadblocks to its implementation. The law—which would have reinstated the net neutrality protections in the state of California—was signed by then-Governor Jerry Brown after the Federal Communications Commission repealed the net neutrality protections at the end of 2017. In a statement following DOJ’s announcement, FCC Acting Chair Jessica Rosenworcel said “[b]y taking this step, Washington is listening to the American people, who overwhelmingly support an open Internet, and is charting a course to once again make net neutrality the law of the land.”
The FCC’s 2015 Open Internet Order helped keep the Internet a level playing field by prohibiting Internet service providers (ISPs) from blocking or slowing Internet traffic or charging websites and services for better access to users. After the FCC repealed the rule, 59 California startups joined a 2018 letter calling on state lawmakers to support the legislative effort to reinstate net neutrality by highlighting the rules’ importance to the Golden State’s startup ecosystem. Engine and 20 Internet companies also wrote a letter to Governor Brown voicing the entrepreneurial community’s strong support for the passage of the law. Shortly after the bill was signed into law, however, the DOJ sued California to block the statute on the grounds that it conflicted with the government’s “deregulatory approach to the Internet,” setting up a multi-year battle over the strongest-in-the-nation net neutrality standards.
The DOJ’s decision to drop its suit against California’s net neutrality law is welcome news for the startup community, which has long voiced its support for strong net neutrality protections. In 2019—on the one-year anniversary of the rule repeal—more than 160 startups joined Engine in calling on policymakers to fully restore the strong net neutrality protections. The startup community remains hopeful that the Biden administration will prioritize the reimplementation of the rules to ensure that the Internet remains a level playing field for companies of all sizes, as well as their users.
Policy Roundup:
House panel sets aside $7.6 billion for remote learning as part of relief package. The House Energy and Commerce Committee this week approved a package of measures to include in President Biden’s $1.9 trillion stimulus plan, including a provision that would allocate $7.6 billion to create an Emergency Connectivity Fund. The fund, which would be overseen by the FCC, would help reimburse schools and libraries for Internet service, hotspots, and laptops used by students and teachers engaged in remote learning as a result of the pandemic.
States move ahead with privacy bills. In lieu of federal action, state lawmakers are continuing to pursue data privacy legislation that would impact the startup community. Virginia is set to become just the second state—following California—to pass its own comprehensive data privacy law, after the bill passed the state's House of Delegates and Senate. Virginia’s legislation, known as the Consumer Data Protection Act, would apply to companies that control or process the personal data of at least 100,000 Virginia consumers, or derive more than half of their revenue from the sale of personal data and control or process data from at least 25,000 Virginians. And other states—including New York, Oklahoma, Utah, and Washington—are considering their own data privacy proposals. As more states consider varying privacy proposals, Congress should pass a uniform privacy law that safeguards users’ information and creates much-needed certainty for the startup community.
Key House Democrat calls for U.K., Kenya trade deals in 2021. House Ways and Means Committee Chairman Richard Neal (D-Mass.) urged the Biden administration this week to complete free trade deals with the United Kingdom and Kenya before the end of the year. President Biden previously said that he did not want to sign any new trade agreements until he has made major investments in the U.S. economy. Under the previous administration, trade negotiations with the U.K. and other countries included discussions about a host of topics impacting the startup community, including digital trade provisions that allow startups to grow on a global scale.
Maryland lawmakers move to override veto on state digital services tax. The Maryland House of Delegates overrode Governor Larry Hogan’s veto of a digital services tax (DST) that would tax Internet companies that profit from digital advertising in the state up to ten percent of their annual gross revenues. The move sets the stage for the state Senate to override the governor’s veto as soon as today. A state-by-state enactment of DSTs would add to an already burdensome regulatory regime for startups across the country, and—as we previously noted—would result in larger companies passing the financial burden on to the smaller companies that depend upon their services.
Startup Roundup:
#StartupsEverywhere: Traverse City, Michigan. SampleServe is a startup that’s helping field technicians, laboratories, and consultants streamline the collection and testing of environmental samples by using a digital chain of custody process to quickly turn testing data into reports. We recently spoke with Russell Schindler, the Founder and CEO of SampleServe, to learn more about his startup’s work, his thoughts on crowdfunding, and his plans for branching out into new markets.
Seminar: Section 230 and your startup. If your startup hosts any content created by users, join Engine’s virtual policy seminar next Wednesday at 4 p.m. ET to learn more about the utility of Section 230 for startups and how entrepreneurs can get involved in the policy debate. You can RSVP here.
