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Apr 30, 2020

Emerging Technologies Washington Update

This week: Coronavirus response; bipartisan Energy and Commerce Committee leaders introduce 5G supply chain bill; App Coalition launches, casting spotlight on growing app economy.

Coronavirus Response

The Latest

Last week, Congress passed, and the President signed into law, interim relief legislation, the approximately $484 billion Paycheck Protection Program and Health Care Enhancement Act. The bill includes an additional approximately $322 billion for the Paycheck Protection Program (PPP), $60 billion for Economic Injury Disaster Loan (EIDL) program grants and loans, $75 billion for hospitals, and $25 billion for testing.

The Small Business Administration (SBA) began accepting PPP loan applications again on Monday and White House Press Secretary Kayleigh McEnany said the agency processed 450,000 loans totaling $48.5 billion in the first 24 hours. In the meantime, Treasury Secretary Mnuchin said that all PPP loans over $2 million will be audited before they are forgiven and that regulatory guidance implementing this procedure will be forthcoming. SBA also published new interim final rules for the PPP on requirements for promissory notes, authorizations, affiliation, and eligibility, additional criterion for seasonal employers, disbursements, and corporate groups and non-bank and non-insured depository institution lenders and updated PPP FAQs. Treasury published guidance on how to calculate maximum loan amounts by business type and SBA published a Procedural Notice providing guidance to approved lenders regarding the sale of participating interest in PPP loans.

On Monday, the President announced a strategy to expand COVID-19 testing. A Testing Blueprint describes the roles and responsibilities of the federal government, state, local, and tribal governments, and private sector and professional associations. A Testing Overview includes a three-stage process to expand testing.

Elsewhere, the President and federal agencies continue to take other steps to respond to the outbreak, including, but not limited to:

  • President Trump signed an Executive Order invoking the Defense Production Act to designate meat and poultry processing plants critical infrastructure and compel them to remain open. The White House also published a fact sheet on the Order.
  • The Federal Reserve announced an expansion of the scope and duration of the Municipal Liquidity Facility, which will offer up to $500 billion in lending to states and municipalities to help manage cash flow stresses caused by COVID-19. The Fed also announced it is expanding the scope and eligibility for the Main Street Lending Program by creating a third loan option with increased risk sharing by lenders for borrowers with greater leverage; lowering the minimum loan size for certain loans to $500,000; and expanding the pool of businesses eligible to borrow.
  • The Treasury Department announced it has made $12.4 billion in initial payments to 93 air carriers and that it has determined that cargo air carriers that receive $50 million or less of payroll support and contractors that receive $37.5 million or less of payroll support will not be required to provide financial instruments as appropriate compensation for the financial assistance. The Department also published the application form for loans to businesses critical to maintaining national security, which may be submitted online beginning April 27 and are due by May 1.
  • The US Postal Service said it revised its Hazardous, Restricted, and Perishable Mail regulations to support rapid deployment of COVID-19 diagnostic tests via mail during the public health emergency.
  • The Department of Health and Human Services (HHS) launched a COVID-19 Uninsured Program Portal to allow health care providers who have conducted COVID-19 testing or provided treatment for uninsured individuals to submit claims for reimbursement.
  • The Centers for Medicare and Medicaid Services (CMS) announced that it is reevaluating the amounts that will be paid under its Accelerated Payment Program and suspending its Advance Payment Program to Part B suppliers effective immediately in light of recent emergency relief to providers and suppliers.
  • The Attorney General issued a memo on Balancing Public Safety with the Preservation of Civil Rights finding that the Department of Justice (DOJ) may have an obligation to address in federal court state or local ordinances that result in “an overbearing infringement of constitutional and statutory protections.”

A complete overview of both congressional and Administrative response efforts is available here and updated daily.

What’s Next

Senate Majority Leader Mitch McConnell (R-KY) confirmed this week that the Senate will return to Washington on May 4 as scheduled. House Democratic leadership initially made a similar statement, but on Tuesday announced that after consultation with Members and the Attending Physician, the House will extend its recess until further notice. The decision fuels continued uncertainty around the timing for Phase 4 coronavirus response legislation. Nonetheless, lawmakers continue to discuss priorities for upcoming legislation.

McConnell said this week that he will prioritize liability protections for frontline workers and reopening businesses and reiterated opposition to including infrastructure investment in COVID-19 stimulus legislation. This potentially puts him at odds with President Trump, who said again on Tuesday that he wants to pursue a major infrastructure package, but acknowledged many Republicans prefer a separate effort not tied to coronavirus relief. House and Senate Democrats continue to prioritize more funds for state and local governments and frontline workers.

Relevant Resources

In Other News

Bipartisan Members Introduce the Utilizing Strategic Allied Telecommunications Act

On Friday, a bipartisan group of Members, including Energy and Commerce Committee Chairman Pallone (D-NJ) and Ranking Member Walden (R-OR), introduced the Utilizing Strategic Allied (USA) Telecommunications Act. The bill would authorize up to three quarters of a billion dollars for a 10 year grant program to promote and accelerate the deployment of 5G networks across the United States. In addition, the bill would require the Department of Commerce to produce a report detailing the state of America’s 5G supply chain and establish an advisory commission made up of public sector and private sector representatives that would help administer the grant program. The bill already has a counterpart in the Senate, S.3189, which was introduced by Senator Warner (D-VA) in January and has five bipartisan cosponsors.

The bill is intended to help America compete against Chinese companies, which currently dominate the 5G infrastructure market. In a statement accompanying the bill, the group said, “Earlier this year, Congress took strong action to protect our communications networks against foreign interference from dangerous companies like Huawei and ZTE...By promoting a more competitive market of trusted alternatives to suspect 5G equipment, we can more easily secure our critical networks and bring like-minded countries with us.”

App Coalition Launches, Casting Spotlight on Growing App Economy                      

On April 29, a number of technology application companies launched the App Coalition to advocate for policies that support consumer engagement through apps. The Coalition represents the first organization to solely focus on developing regulatory policies and legislation to ensure unfettered consumer access to apps and digital content. The need for the Coalition is underscored by a transformation in how digital consumers today interface with technology, spending 69 percent of their time on apps using smartphones or tablets to do things like book hotels and flights, send messages, and engage with their communities of interest.

Founding members of the Coalition include travel and dining apps Booking.com, Priceline, Kayak, rentalcars.com, and Open Table; email app Blix/Blue Mail; social networking app Fritzy; and LGBT dating apps SCRUFF and Jack’d from Perry Street Software. These companies and others slated to join in upcoming weeks offer a more diverse voice and perspective than one exclusively representing the well-known tech giants. Greg Guice of McGuireWoods Consulting will serve as the Coalition’s executive director. 

Although the genesis for the Coalition long preceded it, the current coronavirus pandemic has added another area of focus for the app economy as consumers use apps to stay connected to content, news, services, and community. While overall app usage has surged in recent weeks among numerous technology verticals as most Americans have adapted to shelter-in-place, social distancing, and quarantine orders, in other verticals, such as travel and hospitality, usage has dramatically declined.

As the Senate reconvenes this week, App Coalition members are seeking legislation to exempt small app companies and startups from the Small Business Administration (SBA) affiliation rules for software developers to better reflect the way app developers start and grow their businesses.

The App Coalition also announced that it intends to hold a digital summit in June. More details will be posted on the Coalition’s website, www.appcoalition.org, and in its app. 


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