Innovation in America: The Need for Regulatory Change

America’s most significant technological advancements happen when innovators aren’t waiting for approval. From microchips to mobile technologies, history shows that we’ve led not due to bureaucratic processes but rather through relentless pursuit and creativity.

The United States boasts more Nobel Prize winners than any other nation. Furthermore, nearly half of the world’s unicorns are headquartered here, and in 2024, U.S. venture capital funding reached $178 billion, representing over 50% of global investments. However, if entrepreneurs weren’t limited by regulations, this wealth of innovation could be the standard rather than a rare achievement.

Recently, President Trump enacted the “One Big Beautiful Bill” (OBBB), demonstrating that Washington can indeed reduce constraints. This legislation promises permanent tax relief, new spectrum auctions, and aims to encourage innovators to push their ideas forward.

By reinstating the FCC’s authority over spectrum auctions, OBBB has transformed previously stagnant resources into growth opportunities that entrepreneurs can harness. This kind of leverage has historically benefited giants like PayPal and SpaceX.

Last week, Congress proved it could match the speed of private innovators. Regardless of your opinion on the new law—whether it’s wonderful or not—the market will certainly respond to such momentum. When legislative progress outpaces funding rounds, investors may shift back from seeking yield to riskier ventures. This bill acts as a signal flare for that shift.

However, there’s still much work to be done. Two main issues could hinder the next wave of innovation: the FCC’s interpretation of certain regulations and the lack of federal oversight regarding state-level AI policies. Unless Congress addresses both concerns, we might see a slowdown instead of the digital renaissance President Trump champions.

We were close to putting an AI moratorium into the OBBB, but it seems to have slipped away. The collaboration behind closed doors has led to a set of regulations that fail to establish a cohesive national framework for AI governance. Instead, states are pursuing their agendas, with California drafting a licensing scheme and Illinois considering class action lawsuits against biometric technologies. Such fragmentation will only drive investments overseas rather than keeping them domestic.

The OBBB effectively rights the spectrum. Now, we need to extend that unified framework to AI.

The consequences of neglecting this are already visible. Recently, someone used AI-generated speech to impersonate Secretary of State Marco Rubio, targeting various officials. This reflects the unfortunate reality that policy gaps can lead to serious threats. The FCC has had issues with regulating IP connections adequately, resulting in vulnerabilities that have shifted from robocalls to more dangerous state-sponsored operations.

At Telnyx, we process all outbound calls, yet less than 30% reach their intended recipients. Why? Because the FCC hasn’t embraced the complete IP interconnect technology that’s been available for decades. Instead, we face increased legal uncertainties that stifle innovation in critical areas.

Additionally, with the FCC granting major telecom companies excessive call-blocking rights, the consequences have been detrimental. They routinely block legitimate calls, harming business transactions and undermining the integrity of telecommunication networks.

Consumers still receive billions of robocalls monthly, and mobile carriers are often complicit, profiting at various stages of the process.

Ironically, these companies allocate less than 1% of their revenues to research and development. In contrast, software companies like ours invest nearly 30%. It’s unrealistic to expect AT&T to foster innovation while they shape the regulatory landscape.

The regulations intended to combat bad actors have instead burdened smaller providers with compliance costs that hinder their operations.

The good news is this situation can be rectified, starting with clear IP-to-IP requirements. We need to redefine the standards for identifying fraudulent actors without imposing penalties on legitimate callers.

At Telnyx, we’ve witnessed firsthand what can happen when the federal government supports innovation. We began as a pair of VoIP resellers in Chicago and have evolved into a global communications platform, facilitating billions of calls and AI-driven interactions. Our breakthrough came when federal policy took precedence over state licensing, allowing for substantial growth. When the current FCC enforcement stifles that progress, we end up spending resources on legal matters instead of technological development.

Now, we face similar legal obstacles in the AI domain. If every state imposes inconsistent regulations, investment opportunities will quickly dissipate.

President Trump’s OBBB has set a new course. It’s crucial that Congress finalizes these changes, curbing FCC overreach while preventing erratic state-led AI regulations.

By doing so, we can transform spectrum and tax stability into a thriving platform that creates new job opportunities and safeguards American innovation.

If we delay, we risk ceding this initiative to bureaucrats lacking technical expertise, as well as to foreign competitors who don’t hesitate to innovate.

The builders have paved the way.

Congress, it’s time to step forward.