How the political impasse on Capitol Hill is stifling Silicon Valley.
With the government shutdown now in its second week, the Treasury Department has set a new deadline of October 17 for Congress to raise the debt ceiling. Negotiations remain in stalemate. Public fear about everything from the CDC’s readiness for a flu outbreak to how well NASA could respond to an asteroid strike hangs in the air. Across the U.S. workers hold their breath. All eyes are on Washington.
The pinch is being felt far beyond the public sector. As both sides flirt simultaneously with compromise and a steadfast commitment to towing the party line, ordinary Americans are suffering. Private enterprise is bracing itself for another long week of uncertainty – and the tech industry is no exception.
As a young, dynamic marketplace, the tech sector plays a disproportionate role in job creation. If the deadlock continues, the industry will struggle to absorb the shutdown’s ripple effect, which could have devastating consequences for the wider economy . Whether you’re a bedroom entrepreneur or a blue chip behemoth, here are six activities you might want to postpone until next quarter…
Conducting Government Business
Every company that does business with the federal government will be affected by late payments, and all contractors are effectively out of a job until the situation is resolved. This will affect the big boys like Microsoft and Google, who have major ongoing federal contracts, but the impact will be more keenly felt by independent contractors providing government IT services to small businesses.
Getting Access to Public Information
The shutdown means government websites will no longer be updated, requests for information under the Freedom of Information Act will be postponed, and some public information will be taken offline altogether. The FTC is closed-for-business, so consumers cannot file complaints or register for Do Not Call. Tech firms can expect to deal with a backlog of customer queries when normal operations resume.
Applying for Radio Frequencies
The FCC website is unavailable until further notice, with potentially disastrous consequences for mobile communications companies. No FCC means no spectrum management, which means any new applications for space on the radio spectrum will have to wait until the situation in Washington is resolved. Cell phones, ISPs, tablets - all are reliant on the Office of Spectrum Management to keep the airwaves running smoothly. It’s a critical resource that has been lumped in with ‘non-essential’ federal operations during the shutdown. Don't worry - while it's bad news for anyone about to launch a broadband-reliant product, you can still make calls, send text messages and go online with your existing provider.
Starting a New Business
With the United States Small Business Administration shutting up shop, loans will be disrupted, creating yet another clogged pipeline that could take months to clear. If you’re working on a startup business plan, our advice is to wait until 2014 before applying for a federal loan.
Tech employees who travel abroad for work are experiencing massive delays in receiving visas and passports. Some documents – such as the H-1B – will not be processed at all during the shutdown.
Try floating your stock right now and it will capsize. All IPOs currently being processed have been halted, and new filings are banned altogether. This spells doom for the blue chip boom, as Twitter and other major tech players are hobbled indefinitely by warring politicos.
It’s not all bad news. The U.S. Patent and Trademark office remains open, and the trusty U.S. Postal Service ticks over, but the real impact of the shutdown won’t be clear until the knock-on effects kick in after October 17. Somewhat counter-intuitively perhaps, the best action plan for the tech sector is to mimic the government: keep operations to a minimum, lie low, and wait for the storm to pass before attempting to clear up.