The Future of Smart Cities

By Danny Restivo (posted 9/18/17)

In 2015 a New Orleans home fire killed three children, a mother, and a grandmother. Because the family did not have a smoke detector, the New Orleans fire department wanted to create a program to accurately identify vulnerable neighborhoods with homes that may not have the devices. With the help of a New York-based tech firm, the New Orleans Office of Performance and Accountability began using analytics to identify vulnerable areas.

The team gathered information on neighborhoods with young children, elderly populations and dilapidated homes. While the fire department had issued smoke detectors previously, they were only offered to people who requested them. Under the old program, the fire department gave away 800 smoke detectors. The new analytics program helped install 18,000 smoke detectors since beginning in 2015. A few months after the program began, fire trucks arrived at a residence with 11 family members outside their burning home. They were awakened by a smoke detector recently installed by the outreach program.

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The New Orleans smoke detector program illustrates the benefits of using data to increase public safety. The advent of new technical applications has given municipal administrators access to information on public health, housing, transportation, crime, infrastructure and more. Additionally, the data provides administrators with the ability to increase efficiency and improve essential services. As population’s increase, and more citizens flock to larger urban areas, cities will need to ensure efficient allocation of resources for healthy and sustainable communities.

According to the United Nations, 54 percent of people lived in cities in 2014, but that’s projected to grow to 66 percent by 2050. Cities have turned to analytics and digital applications to streamline government services while reducing costs. With dramatic population increases, it’s estimated that cities around the globe will invest $40 trillion in infrastructure upgrades over the next 20 years, according to Smart America, an Obama-era initiative for solving regional problems with innovative solutions. Furthermore, spending on smart technology has grown from 0.7 percent of city IT budgets in 2005 to 4.1 percent in 2015. That percentage is expected to grow to 7.5 by 2025, according to Deltek, an information solutions provider for government contractors.

Smart City remains a broad term, but using data to improve operations constitutes a key ingredient. For the most part, cities with IoT (Internet of Things) applications like sensors, smart lights or other advanced technologies, offer insight into population patterns, infrastructure usage and public services. Moreover, the growth of cloud technology, digital information storage and other computing services has made it easier to compile and analyze data. As a result, administrators can better track pollution levels, gunshots, foot traffic and other pertinent statistics to help streamline resources.

In September 2015, President Obama announced a $160 million Smart Cities Challenge to help regional communities research and leverage new technology collaborations for tackling traffic congestion, crime, economic growth and improving the delivery of overall services. Roughly $115 million went towards unlocking new solutions in safety, energy, climate preparedness and transportation with grants coming from various federal agencies.

“Every community is different, with different needs and different approaches.  But communities that are making the most progress on these issues have some things in common.  They don’t look for a single silver bullet; instead they bring together local government and nonprofits and businesses and teachers and parents around a shared goal,” Obama said in a statement during the program’s announcement.

After receiving 78 applications from communities around the country, the Smart Cities initiative selected Columbus, Ohio, in June 2016 to receive $40 million to help prototype the future of urban transportation. Four months later, Transportation Secretary Anthony Foxx announced $65 million in grants for advanced transportation technologies, including $11 million in Pittsburgh for smart traffic lights, and $6 million in Denver to help alleviate traffic congestion during rush hour.

In addition to the federal government’s support, universities, private companies and nonprofits have played a large role in driving technology-enabled solutions. These entities have worked together to support Smart City initiatives around the country. Among the highest profile partnerships includes a collaboration among Microsoft, the Global Initiative for Inclusive Information and Communication Technologies, and World ENABLED, a nonprofit that advocates disabled people. The collaboration, which was announced in May, aims to help disabled and aging populations access Smart City technology throughout the country.

As more cities invest in smarter technology, funding growth will continue. In 2015, global investment in IoT applications grew by $14 billion from 2015 to $36 billion, according to Business Insider. Bank of America Merrill Lynch released a report in March that estimates a $1 trillion investment in Smart City technology by 2020, with infrastructure driving much of the increase.

As cities figure out the best way to leverage IoT applications in support of their needs, a number of communities have already invested in technology to help improve their respective cities. Here’s a snapshot of what some cities have done to improve sustainability.Map of the United States

Columbus, Ohio

After beating out 77 other cities, including Austin, Pittsburgh, Portland and San Francisco, Columbus received $50 million in grant funding from the federal government to help develop intelligent transportation systems. In addition to the grants, private companies and other organizations have pledged $277 million in matching funds. The Smart Cities Initiative in Columbus also gathered an additional $90 million in federal funding for a total of $417 million. Among the biggest contributors includes American Electric Power, which has pledged $181 million to help implement 894,000 smart meters that send readings electronically. With the funding, Columbus aims to bring more electric vehicle charging stations, street lights that act as wireless Internet hubs, emergency vehicles that interact with traffic signals, and driverless shuttles. The plan also calls for introducing 780 electric vehicles into the city’s public and private sectors by 2020. The Ohio State University will also provide $64 million in research initiatives. In July, the Columbus Transit Authority said it was going to update its fare boxes on buses to allow payments with a phone. Riders will also be able to update their fare cards online. Columbus also plans to market electric cars around the city, while also expanding power stations to 305 from 108 in the seven-county region. Columbus has until 2020 to use all the funds.

San Francisco

Although San Francisco lost out to Columbus, the U.S. Department of Transportation awarded the city with a $10 million grant to help alleviate traffic congestion. The funding supports six transportation projects with the help of the San Francisco County Transportation Authority and the University of California Berkeley: more high-occupancy vehicle lanes for buses and carpools, more curb space for carpool pickups and drop offs, smart traffic signal systems to help improve flow and safety, connect corridors for pedestrians and bicyclists, create connected electronic toll systems, and deployed testing of autonomous electronic shuttles on Treasure Island.

As a hub for innovation, San Francisco has already begun leveraging tech applications to solve other metropolitan issues. San Francisco utility companies provide mobile access to near-time energy use data, as well as advice on how to save money. The city also began using sensors to help monitor parking spaces, while another application helps drivers find available parking spaces in city garages. As part of their Smart City application, San Francisco wants to phase out single occupancy vehicles by adopting ACES vehicles (Autonomous, Connected, Electric and Shared vehicles). Ultimately, the city wants to turn parking spaces into green spaces or locations for affordable housing.

Chicago

The Windy City received a $3.1 million grant as part of the Smart Cities Challenge to fund the Array of Things Project, which helps the city monitor environmental and infrastructure activity. With the grant, Chicago installed more than 500 nodes throughout the city to capture data on air quality, climate, traffic and other urban features. The partnership with the Argonne National Laboratory, the University of Chicago and the city hopes to create an environment that improves public safety, decrease traffic congestion and the region’s carbon footprint. Chicago hopes to use the data to help create sustainable solutions.

While many cities have used high tech gadgetry as part of their Smart City initiatives, Chicago has used simple tools to create sustainable solutions. Chicago’s water department has spent $6 million over two years to give away 123,000 rain barrels to residents. The 55-gallon barrels, which attach to rain spouts, reduces the amount of water going into the sewer system and allows residents to use the water for gardening or other needs. With roughly 40 percent of Cook County impermeable due to concrete structures, the rain barrels are an asset in storm water management.

Pittsburgh

Like San Francisco, Pittsburgh was among the finalists for the Federal Government’s Smart City Challenge. In lieu of the grant, the Steel City received $11 million in funds from USDOT. Four months before the USDOT granted the funding, the Pennsylvania Department of Transportation offered $11 million in support for the city’s traffic project. All told, local, state and federal sources have pledged $30 million to help support a traffic management center and create adaptive traffic signals that can read conditions at 126 intersections. These signals can use cameras and radar to read traffic on side roads, including bicyclists, and change according to the amount of traffic. The funds will also help city administrators gather information for future traffic decisions. When the program is finished, Pittsburgh will have the largest adaptive traffic signal system in the United States.

Pittsburgh’s Department of Public Works has also announced plans to add nearly 1,200 smart trash cans throughout the city. The trash cans are equipped with sensors that self-monitor garbage levels and inform city workers if receptacles need to be emptied. According to the Department of Public Works, the smart trashcans will allow the department to reallocate 15,000 working hours towards other city projects.

Denver

Like Pittsburgh and San Francisco, Denver was among several finalists in the Smart City Challenge. The U.S. Department of Transportation awarded Denver County with a $6 million grant to help implement traffic management technologies. Denver is working with the mobile application called Waze, a mobile navigation tool to help motorists identify road closures, congested traffic, construction and other traveler information. Denver hopes to build a communication network among 1,500 city vehicles which will alert each automobile of accidents in hopes of reducing crashes by 30 percent in certain locations.

Denver has also partnered with Panasonic, Xcel Energy and the Department of Energy to help create a mixed use facility with 1.5 million square feet of office space, 500,000 square feet of retail and 2,500 square feet of housings units. The community will also contain smart lighting and parking, electric vehicle charging stations, environmental sensors, high-speed WiFi and autonomous electronic vehicle shuttles.

Kansas City

Kansas City opened an online portal in early 2017 to help drivers find parking spots in downtown. The digital application also shows traffic speed and real time location of the city’s street car. As part of the initiative, Kansas City has installed sensors along the streetcar’s 2.2-mile light-rail line, allowing the portal to track the streetcar’s movements and gather information. The sensors will also capture foot traffic, giving nearby entrepreneurs and small business owners valuable information. Kansas City plans to invest $3.7 million in high-tech innovations, with another $12 million pledged from private companies, including Sprint Cisco Systems. Ultimately, the city wants increase the sensors from 2.2 miles to 10 miles.

Louisville, Ky.

In 2015, Louisville began working with a respiratory health startup and the Institute for Healthy Air Water and Soil to help gather information on local air quality.  The coalition helped supply 1,000 inhalers to Louisville residents suffering from asthma. The inhalers had censors installed to help officials map where poor air quality had triggered usage. In one instance, the city was able to identify a portion of town that had three times as much use compared to other locations.  Further analysis revealed a significant level of congested traffic in the neighborhood. As a result, the city has planted a belt of trees separating the road from nearby neighborhoods to reduce particle matter in the area. Doctors were able to take the data from the censors and tailor treatment plans for individuals, with patients experiencing significant improvement.

Other Cities

A host of other cities has implemented a number of initiatives, giving citizens information and methods into critical matters. These municipalities have indirectly served as test labs for other local governments seeking improved services. Coupled with proof of success and budget limitations, public-private partnerships have emerged as a viable path toward innovative solutions. These private entities could provide a wide degree of expertise and flexibility in supporting such endeavors. Although ensuring improved services and increased efficiency while creating a profit-incentive can create challenges, IBM, Cisco and Microsoft, and a host of others, have begun working with municipalities across the country.

Smart City methods also raise a number of legal questions, especially concerns about government surveillance, personal privacy and cyber security. Because many Smart City initiatives and digital programs use complex algorithms, there’s a fear that programs based off analytic data could create unintended consequences. As civic leaders witness the benefits of Smart City initiatives, it will become paramount for other administrators aiming to improve their communities to responsibly implement IoT applications. Moreover, with a trove of data stored in cloud technology, critical data concerning infrastructure and citizens must remain secure from cyber threats.

In early August, Senators Mark Warner (D-VA), Steve Daines (R-MT) and Corey Gardner (R-CO) introduced the Internet of Things Cybersecurity Improvement Act of 2017. The bill would require IoT devices sold to government entities to meet certain requirements, including no fixed passwords and no known security software vulnerabilities.

“The Internet of Things (IoT) landscape continues to expand, with most experts expecting tens of billions of devices operating on our networks within the next several years,” said Gardner in a release. “As these devices continue to transform our society and add countless new entry points into our networks, we need to make sure they are secure from malicious cyber-attacks.”

Another question centers on the President’s agenda. Donald Trump pledged to reinvest in America’s infrastructure during his 2016 presidential campaign, but his domestic legislative agenda has stalled. However, if President Trump does get renewed investment in infrastructure approved in Congress, smart technology could help sustain bridges, roads, utility lines and other critical structures for the next several generations. Furthermore, if America wants to maintain its mantle as a leader in innovation and technology, it must keep pace with places like Barcelona, Berlin, Singapore and Hong Kong, all cities which have made significant investments in smart technology to improve infrastructure. In any event, if supporters believe that Smart Technology can transform our cities in healthy and sustainable communities, it will take a significant federal investment to ensure an equitable distribution benefits.

Industry Overview: P2P Banking

By Danny Restivo (posted 8/29/17)

Peer-to-peer mobile payment application Venmo reported $8 billion in transactions for the second quarter of 2017, doubling its 2016 second quarter numbers. With this trajectory, analysts believe Venmo could process nearly $85 billion in transitions by 2019. Whether its sending money to a roommate for rent or paying a friend for a night out, P2P mobile payment applications enable faster exchanges, but the numbers also illustrate a growing trend in consumer behavior.

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A 2016 survey sponsored by the American Bankers Association reported payments by mobile technology will double to $62.5 billion in 2017, before exceeding $314 billion by 2020. Finance industry research firm Aite Group estimates roughly $146 billion in digital P2P transfers in 2017, compared to $100 billion in 2016.

The statistics underscore consumer affinity for mobile transactions, with only a few applications dominating the market. According to a Morning Consult poll released in July, PayPal remains the primary choice for online payment. The poll surveyed 2,000 people, with 27 percent saying they used PayPal a few times a year. Moreover, PayPal reported 210 million active users during its second quarter earnings, with 6.5 million added. Overall, the company increased revenue to $3.13 billion in the second quarter, an 18 percent increase from the previous quarter.

While PayPal holds the largest share on the market, Venmo (a PayPal owned subsidiary) could challenge their dominance. According to Morning Consult, 11 percent of millennials say they use Venmo several times a day. Coupled with its popularity among a younger generation, and its recent increases, Venmo has positioned itself for tremendous growth in the coming years. Because of a social media component similar to Facebook or Twitter feeds, users can see transfers among friends that include customizable messages (Venmo does allow users to make their transfers private). A transparent payment record on social media has also piqued the interest of marketers and retailers salivating for data on consumer behavior.

Venmo has partnered with a dozen other applications and companies, including White Castle and Munchery, a food delivery service. Like credit cards, the merchants will pay a fee, but Venmo allows users to see who purchased what and where, heightening a company’s social media profile. As its popularity increases, Venmo’s fee may serve as a tiny price for access into a larger market.

In lieu of rising mobile transactions, several banks have banded together to create their own P2P mobile payment platform. In June, Bank of America, JP Morgan Chase, PNC, Wells Fargo, Capital One and 14 other financial institutions, launched Zelle, an application available to 86 million customers. Unlike Venmo, which is a standalone mobile application, Zelle operates within a mobile banking applications. Zelle ensures transactions are instantaneous with an email address and a phone number, whereas Venmo could take a day or two to show on an account. Zelle offers a tighter security structure compared to Venmo, but does not allow non-participating bank members to enroll.

Conversely, the P2P application Square Cash allows users to store money without having to connect to a bank account. Square Inc., a financial services and mobile payment operator started in 2009, launched Square Cash to help business owners and individuals send money via the Square application. Square Cash recently released a physical card allowing users to keep cash on the platform and spend directly from their respective account. Square Cash charges a one-percent fee for those wanting instant access to their funds.

During its World Developers Conference in June, Apple unveiled plans to create a mobile P2P platform via iMessage with iOS 11. Currently, iMessage allows P2P applications–such as Venmo—to send or receive payments. This marks Apple’s first attempt at its own P2P system. Apple’s application will let users send and receive payments through iMessages or their Apple Pay account, using a credit and debit card already stored in their virtual wallet. While the technology may prove convenient for Apple users, those with Microsoft, Samsung, Android, or other non-Apple devices will need a third-party application to send or receive payment from apple users.

As the market shifts towards P2P mobile payment applications, businesses will continually evolve to accommodate consumers. Although not all consumers are ready to cut cash or debit cards.  In the Morning Consult survey, 35 percent expressed a reluctance to use P2P applications because of security concerns.

A California man said he was scammed out of $4,300 worth of camera equipment in July after he used Venmo. According to a news report, the man posted his camera equipment for sale before a buyer contacted him. After agreeing to purchase the equipment, the buyer used Venmo to send a series of $100 payments to the sellers Venmo account. After the money was received, the buyer picked up the camera equipment. A day later the seller was contacted by Venmo saying the transaction did not go through. Venmo also told him he was in violation of the company’s policy and they couldn’t recoup the money. According to Venmo’s terms, personal accounts may not be used to receive business, commercial or merchant transactions, unless otherwise specified.

On the international stage, mobile P2P applications may serve a larger purpose, especially for rural “unbanked” populations. The GSM Association, a trade body that represents mobile operators worldwide, reported that mobile banking accounts surpassed traditional banking accounts in Sub-Saharan Africa in 2016.

 

According to the report, more than 40 percent of the population uses mobile money in seven sub-Saharan countries. The statistic in Africa highlights potential financial opportunities for poorer populations around the world. Peer-to-peer applications could give communities with limited financial resources the ability to access savings accounts, loans, money transfers, or remittances.

In the United States, Rep. Patrick McHenry (R-NC) introduced H.R. 6118, the Financial Services Innovation Act. McHenry’s bill aims to support financial technology while also creating investment opportunities for regions with a dwindling number of small businesses. McHenry’s bill would ensure loose guidelines for financial technology and innovation, while presenting different possibilities for the public and private sector.

“New financial technologies already make it easier to pay friends, save for college, or access credit needed to start and grow a business,” McHenry said in statement when the bill was introduced in September 2016. “Continued innovation will only further that progress, making it easier and cheaper for all Americans to access our financial system.”

“Peer-to-peer banking technology has created a conducive atmosphere for transactions, but as financial technologies evolve, institutions must keep pace with new platforms to appease consumer demand,” says Brett Goldman, DMGS’s Manager of Special Projects, “As this is all happening, financial regulators must maintain a framework that encourages growth while protecting consumers.” DMGS will continue to monitor the growth of mobile banking technologies in the US and abroad.

Legislative Insight: The Opioid Epidemic

By Danny Restivo (Posted 7/28/17, Updated 8/4/17)

It’s difficult to find an area of the country that has been untouched by the scourge of opioids. According to the Center for Disease Control, opioid-related deaths quadrupled from 1999 to 2015. Several states have suffered disproportionately—West Virginia, Ohio, Kentucky, Rhode Island and New Hampshire have the highest per-capita overdose rates in the country. With more than 33,000 opioid-related deaths in 2015, the epidemic has forced itself in into the national spotlight.

Both Democratic and Republican lawmakers at the federal and state level have presented a host of tools to help communities fight opioids. Whether it’s tightened drug enforcement, harsh prison sentences, or better access to treatment, officials have introduced comprehensive policies to help stem a complex problem. While many experts believe in a multi-faceted policy, one CDC statistic starkly illustrates the epidemics core problem: as opioid-related deaths have quadrupled over the past 15 years, the rates for prescription pain killers have tripled. Although prescription rates for painkillers peaked in 2010 before decreasing by 18 percent, there were more than 236 million opioid prescriptions written in 2015 in the United States—that’s about one bottle of opioids for every American adult. Moreover, as communities and healthcare providers increase oversight, addicts have turned to heroin or fentanyl, a cheap and dangerous synthetic opioid.

In March 2016, the CDC released guidelines for prescribing opioids, which said opioid treatment for non-traumatic, nonsurgical acute pain is rarely needed for more than seven days. The guidelines include a host of recommendations; The guidelines include 12 recommendations that are broken into three main categories:

  • determining when to continue or initiate opioid use for patients suffering from chronic pain;
  • determining opioid selection, dosage, duration, follow-up and discontinuation;
  • assessing the risk and addressing harms of opioid use.

The recommendation calls for doctors to check prescription tracking systems to make sure patients weren’t receiving medication anywhere else. A few months after the guidelines were released, West Virginia—which had the highest rate of opioid overdoses with 41.5 per 100,000 people—announced the state would begin implementing some of these policies.

“These new guidelines will give physicians and patients the facts they need to make more informed decisions about treatment,” West Virginia Governor Earl Ray Tomblin said in a statement. “With more than 600 opiate-related overdose deaths in West Virginia last year, we must continue making every positive change we can to break the cycle of addiction.”

Federal Action

Shortly after his inauguration, President Donald Trump created the President’s Commission on Combating Drug Addiction and the Opioid Crisis. Trump tapped New Jersey Governor Chris Christie (R) to serve as chair of the panel. Other commission members include Massachusetts Gov. Charlie Baker (R), Gov. Roy Cooper of North Carolina (D), former Rhode Island Rep. Patrick Kennedy and Dr. Berta Madras, a professor of psychobiology at Harvard Medical School.  The commission aims to study the federal government’s response and offer recommendations to stem the opioid epidemic. On August 3rd, 2017, the Commission published their interim report. The final report is expected later in the Fall of 2017.  Among the recommendations, is a proposal to waive the prohibition on using Medicaid funds to pay for residential substance abuse treatment. 

In December 2016, then President Barack Obama signed the 21st Century Cures Act. The bipartisan legislation provides $6.3 billion to the National Institutes of Health, with $1 billion in grants to help states fight the opioid epidemic for two years. Eighteen months prior, Obama signed the Comprehensive Addiction and Recovery Act, which authorizes $181 million in treatment and recovery services, as well as prevention services. Furthermore, the Department of Health and Human Services created the Substance Abuse Prevention and Treatment Block grants. The program provided $1.85 billion in funding for state alcohol and drug authorities in 2016, with $371 million allocated for primary prevention services in 2017.

New York Senator Kirsten Gillibrand (D) introduced the Opioid Addiction Prevention Act of 2017 in early April.  Co-sponsored by Arizona Senator John McCain (R), the proposed legislation gleans from the CDC’s guidelines, requiring medical professionals to adhere to a policy that limits opioid prescriptions for acute pain that does not exceed a seven-day supply. The law does not impact patients using opioids for chronic pain, cancer care, hospice or end-of-life care.

“Too many lives have been destroyed, too many families have been torn apart, and too many communities all over New York and suffering because of this tragic epidemic,” Gillibrand said in a release. “The Opioid Addiction Prevention Act would target one of the root causes of the opioid addiction crisis, which is the over-prescription of these powerful and addictive drugs for acute pain. I am urging my colleagues in Congress to pass this measure to help curb the growing opioid crisis.”

The debate over Obamacare repeal and Medicaid funding has further complicated opioid prevention measures. Currently, Medicaid expansion under the Affordable Care Act has allowed hard hit states like West Virginia, Kentucky and Ohio to provide expanded treatment services. According to the Kaiser Family Foundation, Medicaid covers 3 in 10 people addicted to opioids. Medicaid expansion has helped decrease the number of uninsured hospital visits due to behavioral health from 20 percent to 5 percent from 2013-2015. To help curb treatment gaps created by an Obamacare repeal, Republican Senators have a proposed $45 billion over 10 years for substance abuse treatment as part of their healthcare replacement plan.

Democratic and Republican Senators from opioid-plagued states have said the funding falls well short of what’s needed.

“I have serious concerns about how we continue to provide affordable care to those who have benefited from West Virginia’s decision to expand Medicaid, especially in light of the growing opioid crisis,” said West Virginia Senator Shelley Moore Capito (R) in a statement on July 18. “All of the Senate health care discussion drafts have failed to address these concerns adequately.

State Action

In lieu of federal funding, 47 state legislatures considered 536 bills in 2016 related to drug abuse prevention, according to the National Conference of State Legislators. Many of these proposals deal with comprehensive programs that establish prescription drug monitoring programs, tighter pain clinic regulations and legislation that ensures first responders have access to lifesaving drugs for overdosed patients. While many opioid experts believe in comprehensive efforts, they believe limiting prescriptions can have a significant impact on the epidemic. A 2009 study by the National Institute of Health revealed 86 percent of drug users had used prescription pills nonmedical before moving to heroin. These addicts said they primarily received their pills from prescriptions written for them, or for friends and family. As a result, states have targeted prescription guidelines.

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We have compiled a list of key states that have introduced prescription pain killer reform in 2016 and 2017 (note that this list is not exhaustive):

States Introducing or Approving Opioid Legislation in 2017

Alaska

Both the Alaska State Senate and House approved legislation restricting opioid prescriptions in June. The legislation, which was proposed by Governor Bill Walker (I), limits first-time opioid prescriptions to a week with certain exceptions. Under current law, doctors can provide up to a month of prescription pain killers. The new law also effects dentists, veterinarians, and eye doctors. Healthcare providers must also receive pain management and opioid abuse education, while monitoring prescription rates. Since 2006 opioid overdose rates have quadrupled in Alaska. Ninety-five Alaskans died of opioid overdoses in 2016 from heroin and prescriptions. Studies also revealed a majority of Alaska’s heroin users became addicted to prescription opioids before moving on to heroin.

Connecticut

The State Legislature approved a comprehensive piece of opioid legislation with a unanimous vote which Governor Daniel P. Malloy (D) signed on June 30th. The bill increases prescription oversight, expands data sharing between state agencies, limits maximum prescription for minors from seven to five days, and requires individual and group health insurers to cover necessary treatments. The bill also requires prescribers to inform patients about the dangers of opioids and mandates electronic prescriptions instead of written. “Opioid addiction and prescription drug abuse is a disease that is impacting nearly every community and people of every background,” Governor Malloy said after signing. “It is a complex crisis that does not have one root cause, nor does it have a simple solution, but we need to do everything in our power to treat and prevent it.”

Florida

Opioids, including heroin and synthetic opioids like fentanyl, killed an average of 14 people a day in Florida during the first half of 2016. The Sunshine State has experienced a long history of opioid issues with an aging population and a higher number of pain management clinics than most states. While Florida has worked to close unregulated pain clinics, many addicts have turned to heroin and fentanyl, increasing overdose rates.

In May Governor Rick Scott (R) declared a state of emergency because of the opioid crisis. He then issued orders for mandatory minimums on fentanyl; 4 grams will receive a minimum of three years, 14 grams will receive 15 years and 28 grams will net 25 years. The bill also allows prosecutors to charge fentanyl dealers with homicide if they sell a fatal dose of the drug.

Indiana

Governor Eric Holcomb (R) signed legislation in June limiting opioid prescriptions to adults and children to seven days. The law also expands treatment access for pregnant women and mothers, expands treatment facilities throughout the state, creates a treatment center for non-violent drug offenders and removes barriers for starting a needle sharing program.

Indiana has the 17th highest rate of overdose deaths of any state, but is among the hardest places to find treatment, according to the CDC.

Kentucky

A law passed by the Republican-majority prohibits prescribing patients with acute pain for controlled substances for no more than three days. The law, which was implemented in June, exempts prescribers giving patients a larger supply to treat chronic or cancer-related pain. While the three-day limit is the toughest in the nation, the Kentucky Board of Licensure must develop regulations to implement the rule. The new law includes harsher penalties for heroin and fentanyl, while also broadening the definition of synthetic opioids.

Louisiana

Governor John Bel Edwards (D) signed three bill in June to help fight Louisiana’s increasingly deadly opioid epidemic. One of laws implements a seven-day limit on for first-time prescriptions for acute pain. Another bill requires prescribers to check a database before prescribing an opioid to help prevent against doctor shopping. Another piece of legislation creates a 13-member advisory council on heroin and opioid prevention to help create policy recommendations for the state. According to data from the CDC and DrugAbuse.gov, the Bayou State had the sixth highest opioid prescription rate.

Michigan

Governor Rick Snyder (R) has spearheaded an effort to curb opioid prescription abuse. In April, the Department of Licensing and Regulatory Affairs announced a new prescription monitoring system that allows prescribers to see which schedule 2-5 substances have been prescribed to patients. Two months later the assembly approved a package of bills recommended by Snyder’s opioid task force. One of those proposal allows Medicaid to pay for treatment and detox services. Another bill allows pharmacists to refuse opioid prescriptions if they believe the patient forged or received an improper prescription.

New Hampshire

From 2013 to 2015, the number of overdoses in New Hampshire doubled from 200 to 400. In January, the New Hampshire Board of Medicine and the Board of Nursing adopted several regulations to stem the state’s opioid epidemic. One of those regulations includes a risk assessment before doctors prescribe an opioid. Doctors can now check a database in the state’s prescription drug monitoring program to ensure patients are seeking drugs from multiple doctors. Furthermore, opioid prescriptions in emergency rooms, urgency care settings, or walk-in clinics cannot exceed seven days.

New Jersey

The Garden State established one of the most stringent pieces of opioid legislation in 2017, thus far. Governor Chris Christie (R) signed a law in February that limits opioid prescriptions from 30 days to five days, and requires insurance companies to accept opiate addicts without delay. The Medical Society of New Jersey strongly opposed the law. Following Christie’s signature, the organization released a statement. “Unfortunately, statutory medication limits decrease the quality of care and life for pain patients. The Medical Society of New Jersey opposes such intrusions into the practice of medicine, especially if they do not take into account individual patient circumstances, like medication tolerance or access to insurance, transportation or alternative treatments.” Nonetheless, the bill received 64-1 support in the state assembly.

New Mexico

A New Mexico law implemented on January 1 requires health care providers to screen new and extended opioid prescriptions against a statewide electronic database. In April, New Mexico became the first state to require all local and state law enforcement to provide officers with opioid antidote kits to help curb overdoses. New Mexico also became the first state to dispense naloxone without a prescription, while also requiring all licensed clinicians to undergo extra training for prescribing painkillers. New Mexico had the second highest overdose death rate in the nation in 2014, but recent CDC statistics show it dropped to 44th.

New York

In June 2016, Governor Andrew Cuomo (D) signed comprehensive legislation limiting opioid prescriptions and increasing access to treatment services. Cuomo’s legislation limits opioid prescriptions from 30 to seven days, while adding 270 beds for treatment and 2,335 program slots for substance abuse.  A year later, Cuomo signed another piece of opioid legislation that invests more than $200 million to support prevention, treatment and recovery programs throughout the state. The funding requires mandatory prescriber education. Nearly three quarters of the funding is earmarked for community-based providers. “This comprehensive investment addresses each component of heroin and opioid addiction – prevention, treatment, and recovery – to help individuals and families break this cycle of misery, save lives and create a stronger, healthier state for all,” Cuomo said in a release.

Ohio

Governor John Kasich (R) announced new rules for prescribing opioids in March 2017. With the approval of the Ohio Attorney General, Kasich’s order says doctors, dentists and nurses can’t prescribe more than seven days of narcotic pain killers, and only five days for minors. The law comes after a series of restrictions on pain pills began in 2012. Those restrictions cut down on pills prescribed in Ohio by 20 percent, from 2012 to 2016. Policymakers believe the new law will reduce the number of pain pills dispensed by 109 million a year.

Rhode Island

Governor Gina Raimondo (D) gave authorities greater enforcement ability in the fight against opioids after signing three bills in June. The new legislation allows law enforcement to access prescription painkiller databases, requires doctors and nurses to discuss the risk of addiction when writing opioid prescriptions, and expands the type of pharmaceuticals prescribed with electronically. The law comes a year after Raimondo approved a bill to limit initial opioid prescriptions for adults to 30 milligrams equivalents per day for a maximum of 20 doses. The law applies to acute pain from injuries and surgeries, but does not apply to chronic pain. The law also requires pharmacies to transmit opioid prescriptions to a state database within one business day of dispensing.

Virginia

The Commonwealth approved four bills as part of a comprehensive plan to fight the state’s opioid epidemic. Among those bills includes a regulation mandating electronic prescriptions to pharmacies by 2020. The law also stipulates a workgroup must study how best to implement this policy. Governor Terry McAuliffe (D) also signed laws that allows community organizations to dispense naloxone. The law also encourages needle exchange programs and a plan to help families suffering from opioid addiction access help from local organizations.

(Several other state legislatures, including Georgia, Washington, Oregon, North Carolina and Hawaii have introduced comprehensive legislation to help curb the opioid crisis in 2017.)

States Passing Notable Legislation in 2016

Arizona

Governor Doug Ducey (R) issued an executive order in October 2016 prohibiting initial opioid prescriptions from lasting more than seven days. The order limits all opioid prescriptions for children, but only effects adults with insurance provided by the state or Medicaid. The order does exempt those afflicted with cancer, chronic disease and traumatic injury.  “In 2015, 401 people in Arizona—more than one a day—died from prescription opioid overdoses. And in 2013 there were enough prescription pain medications dispensed to medicate every adult in Arizona around the clock for two weeks,” Ducey said in a statement following his signing of the executive order.” He added, “The large prescriptions of highly addictive substances are incredibly dangerous, and we have to take action now. By limiting the fills of prescriptions for all state health plans, we hope to encourage private companies to consider similar action.”

Massachusetts

In 2014, Massachusetts had the highest rate of emergency room visits due to opioid-related issues. According to information from the Healthcare Cost and Utilization project, 450.2 per 100,000 people visited the hospital in the state, while the national average hovered around 177.7. A law signed by Governor Charlie Baker (R) in March 2016 limits initial prescriptions for opioids to a seven-day supply, but those receiving treatment for cancer or chronic pain remain exempt. The law says a mental health professional must provide a substance abuse evaluation to anyone entering an emergency room from an opioid overdose, while requiring doctors to check a statewide database each time they make a prescription. It also allows schools to verbally screen students to help identify those at risk of drug addiction.

Maine

The CDC reported in 2014 that Maine had the highest prescription rate for long-term extended release opioids, the most abused prescription opioid according to experts. In 2016, Republican Governor Paul LePage unveiled a comprehensive reform to opioid prescriptions. The law limits most patients to 100 milligrams a day, while exempting those with long-term pain or cancer diagnosis. Another aspect of the law limits opioid painkiller prescriptions to seven days for acute pain and 30 days for chronic pain. A year after its implementation, opioid prescription rates fell by 30 percent in seven of Maine’s eight counties. However, skeptics of new law claim that it could force addicts into heroin.

Edited by Brett Goldman

State Budget Showdown

By Danny Restivo and Brett Goldman (posted 7/10/17)

As the fiscal year ends on June 30th, nearly all 50 state governments across the United States (with the exception of Vermont) are required to maintain a balanced budged whether by statue/law, constitutional amendment, or judicial decision. From state to state, the requirements vary from the simple introduction of a budget, to a balanced budget, to budgets that are based off of the available cash on hand by the state.

There are three general kinds of state balanced budget requirements, according to the National Conference of State Legislatures:

  • The governor’s proposed budget must be balanced (43 states and Puerto Rico).
  • The legislature must pass a balanced budget (39 states and Puerto Rico).
  • The budget must be balanced at the end of a fiscal year or biennium, so that no deficit can be carried forward (37 states and Puerto Rico).

Unfortunately, 2017 has seen a situation where 11 states did not pass their budgets by the June 30th deadline. In some states, such as New Jersey or Rhode Island, political differences between legislators created a budget impasse; whereas in other states, such as Illinois, budgets have not been passed in nearly three years. We have compiled a breakdown of states that saw budget impasses in 2017. Please note that some of these are still undergoing budget negotiations and as such the situation may evolve.

New Jersey- (Status: Resolved)

On Monday, July 3rd, Governor Chris Christie signed a $34.7 billion budget ending a three-day government shutdown that sparked a backlash against the governor.

While the publicity focused on Christie’s Sunday trip to the beach, the shutdown stemmed from a plan to restrict the state’s largest health insurance provider, Horizon Blue Cross Blue Shield of New Jersey. Christie had approved of the Democratic-controlled Assembly and Senate’s other appropriations, including $325 million in additional funding from Christie’s proposed budget from February, which include $150 million in additional school funding. However, he wanted lawmakers to sign off on a bill capping Horizon’s reserves, while using the excess funding to pay for drug treatment and other care for the poor and uninsured. In the insurance industry, reserves are often called risked-based capital, which helps hedge against unexpected healthcare payouts.

Essentially, Christie wanted to cap Horizon’s reserves, and giving an estimated $300 million for the expansion of drug treatment programs. He also wanted to give the assembly the control to appoint two members to Horizon’s 15-member board. Assembly Speaker Vincent Prieto (D-Hudson) pushed back against Christie’s plan, calling it “extortion” as Horizon initially had nothing to do with the state’s budget.  As a result, Christie pledged to line-item veto democratic-backed spending if lawmakers didn’t pass the Horizon cap. Meanwhile, Senate President Stephen Sweeney (D. Gloucester) posted S4 (the “Horizon Bill”) to the Senate’s June 29th schedule, where it was passed. Speaker Prieto, however, refused to post S4 to the Assembly schedule and instead posted the budget (A5000) for a vote. The vote on A5000 became deadlocked, and Speaker Prieto refused to remove the bill resulting in the state-government shutting down.

Legislators worked through the holiday weekend to come to a resolution on the Horizon Bill and budget impasse. On Monday, July 3rd, Speaker Prieto, Senate President Sweeney, and Governor Christie emerged with a resolution and the state government reopened for business as usual.

The following is an excerpt that was sent to our NJ clients regarding the resolution of the shutdown:

“Part of this Budget compromise is contingent on a new Horizon bill— (S2) —that will address issues that were raised with S4. Horizon Blue Cross Blue Shield of NJ executives spent the weekend meeting with Speaker Prieto, Senate President Sweeney, and other legislators. Following tonight [July 3rd)’s budget vote on A5000, the Assembly then voted on S2, which resolved many of the issues with S4 including:

  • ​Establishing an appropriate range of reserves for Horizon, requiring a minimum of 550% of risk-based capital reserves and a hard cap maximum of 725%, sufficient to cover claims for all of its policy holders in the event of a catastrophic medical emergency such as hurricane Sandy, when regular premium payments from policy holders were delayed;
  • Requiring the state department of Banking and Insurance (DOBI) to commission independent annual audits to determine Horizon’s reserve level, which would be paid for by Horizon;
  • Creating a process for Horizon to submit a plan to DOBI to determine how excess reserves above the 725% level should be used to reduce future policy holder premiums or otherwise benefit policyholders.
  • Requiring the appointment of two additional public members with a background in healthcare, finance, or insurance to the horizon board—one each by the senate president and speaker—bringing the total board membership to 17, including 11 members currently appointed by Horizon and four by the Governor;
  • Requiring DOBI to establish requirements for health services corporations to provide detailed financial reporting information, including executive compensation, and to post this information on the department website.
  • Removing “insurer of last resort” language.”

 Pennsylvania- (Status: In Progress)

On June 30th, the Pennsylvania State Legislature approved a $31.99 billion budget for the 2017-2018 year. While the budget received bipartisan support, lawmakers have yet to agree on a funding package and remain in negations at the time of publication.

The bill awaits Governor Tom Wolf’s (D.) signature until lawmakers can solve a $2 billion deficit. If the Governor does not veto the bill, it will automatically become law without his signature. In 2016, Wolf vetoed the legislature’s budget, but the government kept spending money. As a result, schools, counties, and nonprofits began taking out loans to stay afloat, and not until local governments threatened to withhold taxes and schools said they would remain closed after the holiday break did lawmakers finally approve a budget.

This year, lawmakers have debated several options for funding the deficit, including borrowing up to $1.5 billion against future revenues from a 1998 multistate settlement with tobacco companies. While Wolf and Senate Republicans have supported the idea, House Republicans have opposed it adamantly. House Republicans have suggested leveraging 40,000 video gaming terminals at bars, taverns and other establishments for more tax revenue. Senate Republicans have pushed back, saying it will cut into casinos which already contribute a large sum to government coffers. Some Democrats have lobbied for a tax on Marcellus shale drilling, but the Republican majority has strongly refused to bring tax increases to a floor vote. Other options include expanding privatized liquor operations while reassessing the sales tax on purchases of alcoholic drinks. Senate President Joe Scarnati, (R. Jefferson) has said he’s working on legislation to expand casino gambling in the state, but few details have emerged.

The 2017-2018 proposed budget is roughly 1.6 percent higher than the $31.5 billion budget in 2016-2017. Unfortunately, the budget faced a $1.1 billion shortfall in 2016 due to an underestimation of human services and corrections needs. The budget became law without Wolf’s signature when lawmakers delivered a $1.3 billion package in additional funding centered on cigarette tax increases.

As of publication, the House and Senate were in session over the weekend to move various pieces of legislation needed to complete the budget process.  Both the House and Senate returned on Monday, July 10th at 11:00 a.m. for another long day of negations.

Other states with Budget Impasses

Connecticut (Status: Unresolved)

Democratic Governor Daniel Malloy took executive control of the state’s finances on June 30 after lawmakers failed to agree on a budget. Despite having one of the highest per capita incomes in the country, the nutmeg state could run a $2.3 billion deficit in 2017-2018, roughly 12 percent of the state’s budget. Lawmakers haven’t submitted a budget to Malloy who has requested a three-month provisional budget that includes cuts and modest tax hikes. Democrats have a 79-72 edge over Republicans in the House.

As Connecticut moves into day 10 of its budget crisis, state parks, beaches, campgrounds, and museums are beginning to feel the pinch.  Statements from Governor Malloy’s office indicate that a resolution may be found by the July 18th session of the legislature, but a path forward remains to be seen.

Delaware (Status: Resolved)

Budget gridlock had lasted for months over issues including a Democratic push to raise

the personal income tax and disagreement over changes to the prevailing wage for state construction projects. As a result, the Delaware legislature missed its June 30th budget deadline for the first time in decades. Spending the weekend hunkered down in the state house, legislators reached a deal that included a new spending plan on July 2nd. The budget restores cut funding to nonprofits, public health programs and schools, and raises taxes on real estate transfers, tobacco and alcohol. Gov. John Carney (D) signed the budget early on Monday July 3rd.

Illinois (Status: Resolved)

 The Democratic-controlled House overrode Republican Governor Bruce Rauner’s veto and implemented a $36 billion budget for 2018, which includes $5 billion in tax increases. The Democratic-controlled Senate sent the bill to Rauner on Tuesday. The Governor vetoed the bill before the Senate quickly overruled him. The bill then moved to the House where Democrats overrode the Rauner’s veto. With a $6.2 billion annual deficit and $14.7 billion in overdue bills, credit-rating houses have threatened to downgrade Illinois’s credit rating to junk. Meanwhile, the United Way has predicted the demise of 36 percent of Human services agencies within the state.

Massachusetts (Status: Resolved)

Slumping tax revenue has left the bay state with a $430 million hole. By July 6th, lawmakers said they had agreed upon a $40 billion budget but had not held a vote. The state approved an interim $5.2 million budget last month. Marijuana legalization remains a point of conflict among lawmakers. The Senate has proposed a 12-percent tax (which voters approved in November) while the state house has proposed increasing it to 28 percent.

On July 7th, both houses of the Massachusetts legislature approved the budget. The compromise trims spending by about $400 million to $500 million from spending plans previously approved by the House and Senate. It also takes other steps to account for a $733 million reduction in anticipated tax revenues for the 2018 fiscal year that began July 1,

Oregon (Status: Resolved)

State lawmakers have passed multiple bills to keep the government operating, however, a couple items remain unfunded. Lawmakers have debated ways to best solve a $1.8 billion budget gap, which threatens hundreds of thousands of people on Medicaid and child welfare services. Governor Kate Brown (D) has pledged to rein in spending by instituting a hiring freeze for state employees, as well as taxing hospitals and insurance plans. One proposal introduced by lawmakers would cut $424 million over the next two years by halting automatic inflation increases in the budget while eliminating unfilled government jobs; however, legislators failed to find votes to reform Oregon’s tax system and public pension costs, leaving the toughest decisions to future sessions.

Rhode Island (Status: Unresolved)

The Rhode Island assembly ended abruptly on June 30th with the state’s $9.2 billion budget in limbo.

Senate President Dominick Ruggerio (D) and House Speaker Nichoas Mattiello (D) aren’t on speaking terms and Gov. Gina Raimondo (D) says she has been in touch with both but isn’t getting into the middle of the rupture or offering to mediate it. While there be no state “government shutdown” due to a 2004 provision whereby the state operates on the previous year’s budget, tensions remain high. Most state beaches, parks and government agencies—including law enforcement—will remain open until a resolution is reached. According to a memo, state budget officials will meet with individual department leaders to help balance their books and find an additional $25 million in unspecified cuts called for in the proposed budget. However, hiring and staffing of agencies will not be impacted, assuming a budget is passed in the coming months.

Wisconsin (Status: Unresolved)

 After missing a June 30 deadline to pass a budget, Wisconsin lawmakers remain committed to approving a smaller budget. Republican lawmakers control the legislative and executive branch. They have asked for a smaller budget that increases support for rural school districts without raising taxes. Lawmakers have also struggled to reach a deal on how to plug a $1 billion transportation hole. Earlier this year, Governor Scott Walker (R) asked lawmakers for $500 million for road construction over the next two years. He later dropped that request to $300 million. In an effort to assuage lawmakers leery of transportation costs, Governor Scott walker released a proposal on July 6, which tapped federal spending to subsidize construction costs. Walker believes federal aid will allow the state to borrow an additional $300 million for the projects.

 

Danny Restivo and Brett Goldman Contributed to This Report

Net Neutrality 2017: The Battle Continues…

By Danny Restivo (posted 7/6/17)

On July 12, 2017, a number of website landing pages will display “blocked,” “please upgrade,” or “paying customers only” banners. Fortunately for active users, the banners will only last 24 hours. These protest banners (example below) will be part of The Day of Action”, which is supported by the likes of Netflix, Amazon, Facebook, Twitter, GitHub, Reddit, OKCupid, Etsy, and a broad coalition of tech, media/social media, e-commerce, and other companies that peg their livelihood to the internet. The campaign aims to raise awareness regarding the Federal Communication Commission (FCC)’s proposed plan to roll back net neutrality measures later this summer.

Just two years ago, the FCC classified internet service providers as carriers under Title II of the Telecommunications Act. The decision forced ISPs to face regulatory measures like public utilities, while ensuring all ISPs treat content equally. Under President Donald Trump’s guidance, the FCC has targeted the regulation, drawing a number of large companies into a fray that may decide how online audiences view content.

The FCC’s net neutrality establishes three rules:

  1. Broadband providers can’t block access to legal content, applications, services or non-harmful devices.
  2. ISP’s can’t impair or reduce lawful internet traffic on the basis of content, applications, services or non-harmful devices.
  3. They may not favor some internet traffic over other internet traffic in exchange for consideration of any kind—no paid prioritization or fast lanes.

“The Internet is the most powerful and pervasive platform on the planet. It’s simply too tom_wheeler_fccimportant to be left without rules and without referees on the field,” said Tom Wheeler, the former chair of the Federal Communications Commission, following the FCC’s 3-2 vote in favor of Net Neutrality in 2015. “Today is a red-letter day for Internet freedom, for consumers who want to use the Internet on their terms, for innovators who want to reach consumers without the control of gatekeepers.”

Since its implementation, the vote has drawn the ire of internet companies such as AT&T, Comcast, Oracle and Verizon. These industry leaders have cited government overreach, as well as limits to free speech and free market principles. Because net neutrality designates ISPs as “common carriers,” such as telephone companies, they are open to a host of other government regulations.

GOP leadership blasted the FCC ruling on similar grounds after it was approved in 2015.

“Overzealous government bureaucrats should keep their hands off the Internet,” Former House Speaker Rep. John Boehner (Ohio-R) said in a statement after the ruling. “More mandates and regulations on American innovation and entrepreneurship are not the answer, and that’s why Republicans will continue our efforts to stop this misguided scheme.”

Image result for net neutrality

Cable companies spent $44 million in lobbying efforts (including other issues besides net neutrality) during the 2015 showdown. Meanwhile, neutrality proponents like Amazon, Facebook and Alphabet Inc (formerly Google), paid $35 million in lobbying efforts that year.

Following his inauguration in January 2017, Trump enlisted the help of three net neutrality opponents to assist his FCC transition from Democratic to Republican control. On January 23, Trump appointed Ajit V. Pai to Chairman of the FCC. The former attorney for Verizon was one of two Republican votes against the 2015 decisions (Pai and Michael O’Rielly were the lone dissenters in the commission’s ruling).

Shortly after the transition, Congress overturned Obama-era internet privacy protections—a Republican bill removed regulations requiring individual permission before ISP’s could sell users data. Only a few days later, White House Press Secretary Sean Spicer announced the President’s goals for reversing net neutrality during a March 30 press briefing. A month later, Pai unveiled plans to loosen government oversight of the internet during a speech at the Newseum in Washington, D.C.

“Two years ago, I warned that we were making a serious mistake,” said Pai. “It’s basic economics. The more heavily you regulate something, the less of it you’re likely to get.”

On May 18, the FCC voted 2-1 in favor of moving forward with rolling back the Obama administration’s Net Neutrality regulation. “The Restoring Internet Freedom Notice of Proposed Rulemaking” does not include specific details on how the FCC will remove Net Neutrality regulations, however the proposal does allow for a 90-day public comment period. The FCC will stop receiving comments on July 18, but will allow a second 30-day commenting period for replies ending on August 18.

The FCC’s proposal includes three key tenants.

  1. Removes Title II classification from ISP’s
  2. Returns classification of mobile broadband internet carriers to private mobile service
  3. Eliminates “the catch all internet conduct standard created by the Title II order”

Mignon Clyburn, a Democrat who previously voted for net neutrality, remained the lone dissenter during the May 18 vote.

“If you unequivocally trust that your broadband provider will always put the public interest over self-interest or the interest of their stockholders, then the ‘Destroying Internet Freedom’ [proposal] is for you,” she said after the vote.

Since FCC announced its proposal, the President has tapped two more members to serve on the commission. On June 14, Trump nominated Democrat Jessica Rosenworcel, who previously served as commissioner until her term ended in 2016. Two weeks later, Trump nominated Republican Brenda Carr, a former FCC aide to chairman Pai.  Carr’s selection solidifies a 5-person commission. According to the rules, no more than three members of the commission may be of the same political party; if both Carr and Rosenworcel are confirmed, Republicans would have a 3-2 majority.

In conjunction with the commission’s plan, Sen. Mike Lee (Utah-R) introduced S. 993: “the Restoring Internet Freedom Act “in early May. With nine other cosponsors, the proposed legislation would prohibit the FCC from classifying Internet Service Providers as Title II carriers ever again. The bill—Lee introduced an identical version nearly a year ago—would require legislative action to implement net neutrality in the future. The bill has been referred to the committee on Commerce, Science and Transportation.

Lee, along with Senate cosponsors Ted Cruz (Texas-R) and Ron Johnson (Wisc.-R), penned an opinion piece about internet freedom in the Washington Post on May 4.

“We reject the idea that the federal government should control the Internet. That’s why we have introduced the Restoring Internet Freedom Act, which will complement Pai’s efforts to repeal the 2015 Internet takeover by preventing the FCC from issuing any similar regulations in the future.”

Meanwhile, 13 Democratic Senators signed a letter supporting the FCC’s Net Neutrality rules which was published in Tech Crunch on May 17.

“By proposing to take away the existing net neutrality protections, President Trump’s FCC is threatening to take away your ability to have free and open use of the internet. This proposal will have profound impacts on the way all of us watch movies, listen to music, do homework, talk to family, consult with a doctor, pay bills, and conduct business. Taking away these rules benefits no one except cable, telephone, and wireless broadband companies.”

The Internet Association, which represents Facebook, Google, Amazon, Netflix and other internet giants, released a white paper titled “Principles to Preserve and Protect an Open Internet” on June 21.  The paper outlined the “substance of the underlying rules” behind the FCC’s Net Neutrality. The paper contains “six principles and policies for preserving a free and open internet by which all proposals and potential changes to the rules will be judged.”

Principles to Preserve and Protect and Open Internet:

  1. Net neutrality rules preserve the success of the internet in driving economic growth.
  2. The FCC’s 2015 rules are working and the entire broadband internet ecosystem is thriving.
  3. Forecasting rules remain necessary to preserve and protect an open internet.
  4. Specific net neutrality rules are needed to preserve an open internet. These rules include: no blocking, no throttling, no paid prioritization, no unreasonable interference or disadvantaging of content by ISPs, and transparency and disclosure requirements.
  5. Open internet protections should apply to broadband internet access providers on a platform-neutral basis.
  6. Strong and effective enforcement by the FCC of net neutrality rules is critical to ensuring that the benefits of the rules are realized.

The paper also states, “a free and open internet remains vital to preserving and protecting the virtuous circle of broadband innovation that benefits edge-based innovators and entrepreneurs, businesses, ISPs, and, above all, consumers.”

It also said, “undoing the existing light touch rules will create uncertainty among edge providers, innovators, and consumers, and would threaten to unravel the most dynamic segment of our economy. Instead, policymakers should seek to preserve the current rules and ensure that they remain on a firm legal footing.”

In addition to large companies supporting net neutrality, more than 800 startups, innovators, entrepreneurs and investors from all 50 states sent a letter to Pai and the FCC.

“Without net neutrality, the incumbents who provide access to the Internet would be able to pick winners or losers in the market,” the letter reads. “They could impede traffic from our services in order to favor their own services or established competitors. Or they could impose new tolls on us, inhibiting consumer choice…Our companies should be able to compete with incumbents on the quality of our products and services, not our capacity to pay tolls to Internet access providers.”

If net neutrality gets abolished, companies like Verizon, Comcast, Oracle and AT&T have said they can now reinvestment on infrastructure and broadband technology in communities throughout the United States.

“We also support Chairman Pai’s proposal to roll back Title II utility regulation on broadband,” Kathy Grillo, Verizon senior vice president and deputy general counsel, public policy and government affairs, said in a statement released on April 26. “Title II (or public utility regulation) is the wrong way to ensure net neutrality; it undermines investment, reduces jobs and stifles innovative new services. And by locking in current practices and players, it actually discourages the increased competition consumers are demanding.”

AT&T Chairman and CEO Randall Stephenson echoed Grillo’s comments.

“AT&T continues to support the fundamental tenets of net neutrality. And we remain committed to open internet protections that are fair and equal for everyone,” he said. “The bipartisan, light-touch regulatory approach that Congress established at the internet’s inception brought American consumers unparalleled investment in broadband infrastructure, created jobs and fueled economic growth. It was illogical for the FCC in 2015 to abandon that light-touch approach and instead regulate the internet under an 80-year-old law designed to set rates for the rotary-dial-telephone era.”

While many Silicon Valley tech companies have voice opposition to the FCC plan, the multinational computer corporation Oracle has levied support. In a letter sent to the FCC in early May, Oracle said “the stifling open internet regulations and broadband classification that the FCC put in place in 2015 – for just one aspect of the internet ecosystem – threw out both the technological consensus and the certainty needed for jobs and investment.”

Image result for federal communications commission 2017

Whether or not Pai and the FCC cement their proposal, the Net Neutrality rules will remain in effect through 2018.

Members of the public have until July 17 to comment on the FCC’s net neutrality proceeding. Reply comments will then be due on August 16, unless the FCC extends the process. After that, a final FCC decision on the net neutrality rollback could take several more months.

DMGS will continue to monitor this and provide updates as it develops.

Brett Goldman edited this report.

“Ni de droite ni de gauche”: A Primer on the French Legislative Election

By: Emily Beiser (Posted 6/21/17)

La République En Marche, the party of the newly elected French president Emmanuel Macron, won 306 of 577 seats in the National Assembly (lower house) on Sunday, June 18th, 2017, giving it a majority of 53%. En Marche, or On the Move, in English, was only founded as a social-movement-cum-election-campaign last April and officially declared a party upon the election of President Macron (who shares his initials—E.M.—with that of the party) this May. En Marche’s win in this election has come at the downfall of the parties which historically held the majority: Le Parti Socialiste on the left, and Les Républicains, on the right. An estimate by the French Newspaper Le Monde suggests just 148 of the representatives (called deputies) elected in 2012 were reelected this year, making this not only an assembly of a new party, but also an assembly of freshmen deputies – three quarters of the assembly.

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What do the results of this legislative election mean for France?

First, we must understand how French elections work. The French term, called the quinquennat, lasts five years. The presidential and legislative terms overlap nearly perfectly, save the six weeks between the presidential election and the legislative election.  Each election is two rounds; the first round requires a majority to win. If no candidate has the majority, which is generally the case, the two candidates with the most votes face off a week later in a second vote. This presidential election cycle was divisive: with each of the top four presidential candidates getting between 19% and 25% of the vote in the first round, though Macron won with a hefty 66% in the second round against the far-right Marine Le Pen. The legislative elections which followed six weeks later showed En Marche’s prominence yet also had the lowest turnout of any legislative elections in the history of the 5th Republic, with just 42% of registered voters voting. By contrast, the previous election, in 2012, saw a 57% turnout rate. The low turnout, unusual for France, means many deputies won with approval from less than 30% of the registered voters.

President Macron claims that his party is “ni de droite, ni de gauche,” or “neither left nor right, but firmly centrist”.

Though a former head of economy for the socialist and deeply unpopular President Hollande, Macron’s economic policy is seen as leaning to the right due to his past work at an investment bank and his support of what he calls the “uberization” of the economy – namely, a flexible workforce which receives fewer protections. En Marche and Macron claim centrism due to leftist standings on social issues including “the family”, refugees, and gender equality. This support of gender equality is reflected in Macron’s choice of gender parity within the cabinet and in En Marche’s selection of legislative candidates, of which over 50% were women. While En Marche lost just 17 of the seats where they ran candidates, the French legislative assembly is at a record of 38% women, up from the previous assembly’s 26%.

The French left has seen a sharp reduction in deputies and a new leftist party, La France Insoumise (or Rebellious France), has proposed a new political system via a 6th Republic. Yet La France Insoumise only won 17 seats. The Parti Socialiste, the established left wing party of former President Hollande, won just 29 seats, making the election a devastating loss compared to the 258 won in 2012. This loss may be due in part to the extreme unpopularity of former President Hollande. Near the end of his time in office, a poll by Le Monde found just 4% of respondents were satisfied with his actions. A former member of cabinet for Hollande—though never a member of Le Parti Socialiste—President Macron retains support for parts of the fading party, endorsing another former Hollande cabinet member, Myriam El Khomri, in a legislative race in which En Marche had no candidate. En Marche’s majority suggests neither collaboration nor cohabitation will be necessary, but it remains to be seen how Macron will lead his new party.

On the right, Les Républicains, formerly known as L’Union pour un Mouvement Populaire in the 2012 election, won 113 seats, a decrease of 72 seats from 2012, despite scandal surrounding party leader François Fillon’s use of public money while Prime Minister. As the party with the second most seats in the Assembly, it remains a significant stronghold of the right. The far-right Front National has a high profile and power to move debate towards the right, especially after Marine Le Pen, the party leader, was in the second round of the presidential elections against Macron. It won just eight seats, but saw an increase compared to winning two seats in 2012.

En Marche’s majority in the National Assembly may not be paralleled by the Senate; just half of the Senate is up for election in September, and it is elected indirectly by officials, with a disproportionately strong rural vote. However, as the National Assembly is the more powerful of the houses in practice, a majority in the assembly solidifies President Macron’s power after a divisive Presidential election. Moreover, it concretes En Marche’s own viability. As the figurehead, father, and namesake for the party, Macron’s performance as president and party leader will be key in the future of the party during and after his tenure as leader.

Emily Beiser is a summer intern in DMGS’s Philadelphia office. She currently in a dual BA program at Sciences Po in France and Columbia University in NYC. 

Election Recap: GA-06 and SC-05 Special Elections, and the British Parliamentary Election

Over the past month there have been several high profile and very hotly contested special elections in the United States, including in Georgia’s 6th Congressional District and in South Carolina’s 5th Congressional District. Each one of these races filled a void left by a Trump cabinet appointee and saw record amounts of money being spent. In addition, earlier in June, the British Parliament held a snap Parliamentary election, that could be the sign of more political instability in the UK following last summer’s Brexit vote. We have compiled a breakdown and analysis of each of these races below.

Georgia’s 6th Congressional District 

Republican Karen Handel defeated Democrat Jon Ossoff to win Georgia’s Sixth Congressional District during the culmination of a hotly contested special election on Tuesday June 20th. Billed as a referendum on President Donald J. Trump, the highly visible race became the most expensive congressional election in United States history, attracting approximately $60 million, according to Issue One, a nonpartisan advocacy group. That money includes funding for the April 18 special election, as well as the June 20 runoff. Outside groups spent more than $27 million on the election, with pro-Handel organizations spending roughly 2.5 times more than pro-Ossoff groups.

With 52 percent of the vote, Handel fills a seat vacated by former Rep. Tom Price, who now serves as the Health and Human Services Secretary in the Trump administration. Handel’s win makes her the first Republican congresswoman in Georgia history. Similarly, she was the first Republican Secretary of State elected in Georgia after a victory in 2006. In 2010, she narrowly lost the GOP gubernatorial nomination before becoming the Senior Vice President of Public Policy at the Susan G. Komen Breast Cancer Foundation. However, she resigned in 2012 after the organization reversed a plan to cut ties with Planned Parenthood. After a failed senate bid in 2014, Handel announced her candidacy for the sixth district’s seat in February 2017. Before Tuesday’s runoff, Handel and Ossoff competed in a special election on April 18. Both failed to grab a majority of the vote. Ossoff, who was one of five Democrats received 48 percent, while Handel was one of eleven Republicans and only garnered 18 percent.

Their respective performances set the stage for a heavily funded race that attracted an intense level of national media.

With $23.9 million spent on both the special election and the runoff, Ossoff came within 10,000 votes of claiming a reliably Republican district located in the Northern Atlanta suburbs. Former Speaker of the House Newt Gingrich held the seat from 1979 to 1999, while Price consistently won the district with more than 60 percent of the vote since his initial victory in 2004. However, Trump only won the district by two points in November–the same margin of victory for Handel. GOP ads attacking Ossoff hammered the former congressional aide and documentary filmmaker for a lack of experience and living outside the district. The ads also focused on funding he received from west coast donors.

Handel will likely face another intense challenge during the 2018 midterm elections.

South Carolina’s 5th Congressional District

Republican Ralph Norman defeated Democrat Archie Parnell in another special election Tuesday night. Norman fills a seat vacated by current White House Budget Director Mick Mulvaney. While Northam won the reliable conservative district 52 to 48 percent, it pales compared to Mulvaney’s 21-point victory in November. Moreover, Trump won the district by 18 points.

Norman has served as a hardline conservative in the state legislature since 2009, and has already promised to join the House Freedom Caucus. Parnell, a former Goldman Sachs and Exxon Mobil employee, saw the Democratic Congressional Campaign Committee pour $300,000 into his race, while the Georgia contest received $5 million. The National Republican Congressional Committee spent less than DCCC in South Carolina, while pouring more than $6.7 million into Handel’s race.

The British Election of June 2017

On June 8th, 2017, each of the United Kingdom’s 650 Parliamentary constituencies elected new Members of Parliament (MPs) to the British House of Commons.  Under the terms of the Fixed-term Parliaments Act of 2011, an election was not scheduled to be called until at May 7th, 2020, however on April 19th, 2017, Prime Miniser Theresa May called for snap elections in the wake of growing discontent.

Although Prime Minister May’s Conservative party had been approximately 20 points ahead in the polls of the Labour party, what had occurred was anything but, and resulted in what has been described as one of the most dramatic collapses in British political history. In a surprising result, the Conservatives received a net loss of 13 seats, with 42.4% of the vote, while Labour received a net gain of 30 seats, with a 40.0% of the vote.

UK election 2017.PNGThis was the closest result between the two main parties since February 1974, and the highest percentage of the vote for an opposition party since 1970. Although the Prime Minister May was invited by the Queen to form a Government, it is currently unclear how long she will retain power, given the overwhelming numbers the Labour opposition government has seen. With rising unrest over social issues, international issues, and of course, the backlash over last year’s Brexit vote, Theresa May’s time as prime minister may in fact be short lived.

Danny Restivo and Brett Goldman Contributed to This Report. Posted 6/21/17