Privacy and security issues were top of mind for policymakers once again in 2016: the Apple-FBI battle pushed questions around encryption to the forefront; massive data breaches and cyberattacks called attention to cybersecurity issues; uncertainty around data transfers between the U.S. and EU persisted; and the heated debate around government access to digital communications thrust electronic privacy reform back into the spotlight. But even with all of these prominent debates, 2016 did not see much actual legislative movement. It’s unclear what will come to pass next year, but we are hopeful that any policies Congress or the new Administration pursue take into account the unique needs and realities of the evolving startup ecosystem.
A Big Year for Startup Policy in 2016. The Startup News Digest will be taking a hiatus over the holidays, but you can still get your startup policy fill on our blog. Yesterday, we began publishing Year in Review posts on some of 2016’s most notable debates in tech and entrepreneurship. Watch this space for reports on capital access, intellectual property, net neutrality, emerging technologies, and more over the coming days. Thanks for all of your support in 2016, and we’ll catch you in the new year!
DC Grapples with IoT Cybersecurity. The Internet of Things (IoT) has grown exponentially in recent years: there are now approximately 6.4 billion internet connected devices worldwide, a number that is increasing by 5.5 million every single day. While the growing IoT holds tremendous potential, recent cyberattacks have left policymakers increasingly concerned over vulnerabilities in connected devices. On Tuesday, the National Institute of Standards and Technology (NIST) issued a set of guidelines on IoT cybersecurity, while the Department of Homeland Security (DHS) published its own policy principles for securing connected devices. The following day, policymakers on the Hill held a joint hearing to discuss security and cyberattacks on the IoT. There was consensus among panelists around the importance of standards and guidelines like those released by the Administration earlier in the week. However, there was disagreement over whether formal regulations are necessary. While one participant called for government intervention, Rep. Greg Walden (R-OR), who chaired the hearing, noted that regulations would be a "knee-jerk reaction" to recent attacks. We’re tracking.
This week, 84 business executives, both male and female, penned an open letter to our next president detailing the steps that he or she should take to bolster the participation of women in entrepreneurship. They grouped their suggestions into three broad categories: access to financial and human capital, access to local and global markets and networks, and help with the changing-face of technology. The lack of diversity in startups and investments is well documented. But it’s also indisputable that improving the landscape for female entrepreneurs will create positive economic and social impacts. As the group pointed out in their letter, if women and men participated equally in the entrepreneurial ecosystem, the United States’ GDP could rise by $30 billion. The business leaders also noted that women invest 90 percent of their income into their communities, meaning that an investment in their careers could easily benefit society as a whole.
Engine is looking for startups, entrepreneurs, and the organizations that support them to sign our letter telling Congress that startups care about broadband competition. Startups, businesses, and other institutions often need significantly more internet bandwidth than consumers use at home, so they rely on what are known as “business data services” (BDS) to deliver high-speed, high-capacity connectivity. Unfortunately, the BDS market is dominated by a few broadband gatekeepers that distort the market and jack up prices for startups and other customers. But that could change soon: the Federal Communications Commission (FCC) is in the process of a rulemaking that will introduce competition and lower prices in the BDS market.
Back in May, regulation crowdfunding went into effect, allowing anyone to invest in a startup through an online platform for the first time ever. But, as Engine has previously explained, we’re skeptical about the extent to which this market will truly take off given the current regulatory framework. We welcomed the House’s passage of Rep. Patrick McHenry’s Fix Crowdfunding Act (H.R. 4855) last month, which makes a couple of fixes from the startup community’s wish list like permitting special purpose vehicles. But the bill was heavily amended before passage, and as Evan argues in Bloomberg this week, it is missing a number of the startup community’s desired changes.
Three weeks ago, Engine took a look at how the Democratic Party’s draft platform would impact the tech and startup communities. This week, the party released their final platform to coincide with the beginning of the Democratic National Convention (DNC). Building on their draft, Democrats committed to rolling out broadband to every American and added language around the deployment of next-generation 5G technologies and free, public Wi-Fi. Some changes were made around encryption as well. While the initial draft did not even mention the issue, the final platform pledged support for a “national commission” on encryption, an idea that has been championed by Sen. Mark Warner and Rep. Michael McCaul.
As the Republican National Convention kicked off this Monday, the GOP also released the final draft of their party’s platform. The platform, which was written with input from the party’s base sourced via www.platform.gop, included generous mentions of issues important to the startup community.
Startups across the U.S. use stock options to attract and incentivize top talent. But as we’ve written before, the current tax code makes it difficult for employees to exercise those options requiring employees to pay taxes on their options even when there’s no public market to sell them to cover the tax burden. On Tuesday, Senators Dean Heller (R-NV) and Mark Warner (D-VA) and Representative Erik Paulsen (R-MN) introduced a bill aimed at remedying this.
In the months since the original Safe Harbor agreement was invalidated by the European Court of Justice, the startup community has been in legal limbo awaiting resolution. The approval of this revised trans-Atlantic data-transfer framework brings much needed certainty for American startups with European users.
Over 40 technology startups from across the country signed Engine's letter to Congress explaining why encryption is essential to their business operations and their users’ digital security and trust. “Encryption is at the heart of many of our products and services. Without the security and confidence that encryption provides, it would be difficult or impossible for us to find customers and investors, and ultimately, grow our businesses...
As the dust settles from last week’s stunning Brexit vote, the broader tech community, which staunchly supported remaining a part of the European Union (EU), is taking stock of the potential repercussions of the decision. While the United Kingdom (UK) and the EU still have to negotiate the exact terms of the deal (assuming the British can cobble together a new government committed to the Brexit), uncertainty surrounds several key issues important to the tech community.
The debate over ECPA reform has come to a standstill in the Senate, with the Judiciary Committee delaying consideration of the Email Privacy Act again this week. The bill, which would require law enforcement to obtain a warrant before accessing digital communications, such as emails, found unanimous support in the House. But a number of Senators have attempted to add controversial amendments that would undermine support for the bill in the Senate.
News from Across the Atlantic. We’ll start with the bad news: the future for the U.S.-EU Privacy Shield is looking grim. As a refresher, in February, U.S. and EU negotiators reached a draft agreement on a restored data transfer pact between the U.S. and EU. But the draft was dealt two blows over the past week: first, European Data Protection Supervisor Giovanni Buttarelli said the shield needs “robust improvements,” and then the European Parliament passed a resolution that the deal violates the EU’s Charter of Fundamental Rights.
Our weekly take on some of the biggest stories in startup and tech policy. In the wake of the Apple-FBI dispute, lawmakers have made encryption a top policy priority. Several Congressional working groups have now been established to determine the best approach to address regulation of encryption technologies, but very little of the public debate focuses on the detrimental impact any new rules could have on startups.
Today, the U.S. House of Representatives passed the widely supported, broadly bipartisan Email Privacy Act by a unanimous vote of 419-0. The bill would make long overdue updates to the Electronic Communications Privacy Act (ECPA) to bring our digital privacy laws into the 21st century. Specifically, the bill would clarify that law enforcement must obtain a warrant—except in certain clearly defined emergencies—before accessing individuals’ electronic communications.