The Minority Media and Telecommunication Council released a report Tuesday highlighting the shortfalls of the small business definition in the Marketplace Fairness Act. Written by former Clinton economic advisor Jon Orszag, the report contends that the current exemption for small businesses included in the Marketplace Fairness Act (S. 743/ H.R. 684) is inadequate and could hurt many small online businesses, including businesses owned by minorities, women, and other under-represented groups. "The definition of small business in the MFA is not supported by any available empirical evidence," Orszag writes.

In the report, Orszag recommends a policy-backed small business exemption, arguing that the thresholds used today by the Small Business Administration make better economic sense.  "If Congress and the President want to establish a MFA safe harbor for small businesses, it would seem like using thresholds based on, and consistent with, SBA regulations would make more economic sense, especially since such definitions allow appropriately for differences across industries," Orszag writes.

According to Census Bureau data, there were roughly 27 million small businesses in 2007. Orszag notes that roughly 7.8 million of those were owned by females, 4.6 million were equally owned by males and females, 1.9 million were owned by African Americans, 1.6 million were owned by Asian Americans and 2.3 million by Hispanics. In addition, 3.7 million were owned by veterans.

During a press call Tuesday, MMTC Vice President Nicol Turner-Lee encouraged Congress to reevaluate the small business exemption to ensure it does not have an outsized impact on minority-owned businesses. "A threshold of $1 million is clearly not going to reach the small business owner that is just starting out that business online; it will not reach that aspiring entrepreneur of color that is trying to experiment with new ways and business models to support their family," MMTC Vice President Nicol Turner-Lee said. The MMTC is a non-profit dedicated to promoting opportunities and reducing barriers to entry for minorities in the mass media, telecommunications, and broadband industries.