Our weekly take on some of the biggest stories in startup and tech policy.
Encryption. It’s been a big week in encryption news. On Monday, the House announced a new bipartisan working group to explore solutions to the ongoing encryption debate. The initiative adds to a growing list of Congressional efforts to address the issue, including introduced and forthcoming bills in both the House and Senate. Then on Tuesday, the FBI made a stunning request to postpone a hearing in its fight to get Apple to build a decrypted version of its iPhone OS, announcing that it had found another way to access the encrypted information on a phone used by one of the San Bernardino shooters. The FBI’s announcement contradicted its prior assertions that its only recourse for accessing the phone’s information was to force Apple to build an entirely new operating system for the device. The FBI’s about-face is significant because it demonstrates one of the central realities of cybersecurity that made the FBI's original request so dangerous: it is incredibly difficult to create a system free from vulnerabilities, and security professionals should be spending their time trying to remedy those vulnerabilities, not creating new ones.
Brussels Attacks Fuel Debate. This week’s horrific terrorist attacks in Brussels will add flame to the already fiery encryption debate. While it’s unclear how the perpetrators of Tuesday’s attacks coordinated the bombings, a number of lawmakers are already speculating that encryption played some role. But in light of the news this week that the terrorists in last year’s Paris attacks used burner phones, not encryption, to evade detection, it would be wise for policymakers not to jump to conclusions too quickly. U.S Attorney General Loretta Lynch took a more cautious approach, noting that it is “simply too early to tell what role encrypted communications played” in the Brussels attacks.
The SEC May Change The Rules for Investing in Startups. Late last year, the Securities and Exchange Commission (SEC) released a report that examined the definition of accredited investor and included proposals for modifying that definition. As we write in an op-ed this week, despite some new opportunities in non-accredited investor financing, the fact that the SEC is considering adjusting the financial threshold for accredited investors is alarming for startups. Increasing the income requirement to inflation would substantially diminish the already limited pool of people eligible to fund startups. Today, around 10 percent of U.S. households qualify as accredited investors. If adjusted for inflation, that figure would shrink to less than 4 percent, according to the SEC’s own analysis. This is bad for startups and bad for our economy.
SCOTUS Nominee on Tech. The Supreme Court will hear a number of major cases over the next few years on topics like patents and copyright, and possibly even encryption and net neutrality. So it’s no surprise that the tech community is wondering whether or not they have a friend in President Obama’s nominee to the highest court, Merrick Garland. In an article this week, CNET unpacks some of these questions. Their conclusion? Garland is still an unknown quantity when it comes to many of the issues our community cares about. Senate Republicans have vowed not to consider a Supreme Court nomination until a new President is elected, so ultimately Garland’s position on various issues may not matter. Still, it serves as a reminder that whoever is appointed as Justice Scalia’s replacement will play a huge role in deciding cases that impact the startup ecosystem for years to come.
Patent Reform Progress. Reps. Tony Cárdenas (D-CA) and Blake Farenthold (R-TX reintroduced the Trade Protection Not Troll Protection Act earlier this week, a bill that could help protect American tech firms at the International Trade Commission from abusive patent troll litigation. Though it may not mean a lot for smaller startups, it's a positive sign that representatives are still seeking ways to limit the power of patent trolls. We'll be following this bill closely as well the VENUE Act, introduced last week, which would get patent cases out of the country's most troll-friendly judicial district.
Women in Tech. Another study has confirmed what we all know by now: there aren't that many women in the tech industry. But this newest report breaks down exactly where women fall out of the tech pipeline and suggests reasons why based on data gathered from a survey of around 9,000 employees at 26 tech companies. The study is part of Women in the Workplace, a 2015 McKinsey and LeanIn study that tracked the progress of women in 118 firms across industries.