To Regulate Facebook, or Pressure Facebook

I’m in the midst of a move, down to the wire and still on the ticking clock so I’m posting a few takeaways (for now) on the two days of hearings in Congress this week on Facebook’s treatment of data and fealty to privacy rules — and its respect for the First Amendment.

If the hearings taught us anything, it’s this: Congress is only discovering that we really don’t know as much as we should about Facebook’s use of data we hand over — either wittingly or without our explicit permission and understanding of how it is monetized.

We may see advertising-related regulations regarding Facebook (and Google and Twitter for that matter) to create more stringent, second-level “opt-ins” after opting in to use the platform to connect and broadcast information.

But it really is up to citizens of all political viewpoints and ideas to keep the pressure on Facebook to live up to its word on platform neutrality — especially conservatives whose voices have been suppressed on the platform.

Axios.com also picked up on privacy literacy ideas floating around since the hearings:

“Members of Congress zeroed in on this idea, grilling Zuckerberg about how hard it is to find, understand and adjust privacy settings on the platform.

  • “Right now I am not convinced that Facebook’s users have the information that they need to make meaningful choices,” said Sen. John Thune (R-SD).

  • Events like the Cambridge Analytica scandal have “exposed that consumers may not fully understand or appreciate the extent to which their data is collected, protected, transferred, used and misused,” said Sen. Chuck Grassley (R-IA).

  • “You have to inform people in pedestrian language what you have to do with your data,” said Rep. Anne Eshoo (D-CA).”

Back to censorship.

Sen. Cruz (R-Tx) pressured Zuckerberg about the platform’s removal of Catholic pages, conservative pages, and suppression of pages whose politics don’t align with the left-leaning culture at Facebook, such as Diamond and Silk, the popular conservative blogger duo. Facebook recently deemed their content “unsafe.”

But no other Senator followed-up on his questions in any way that would have pressured Zuckerberg to express a full-throated defense of all points of view on the platform.

The “Facebook CEO said at the time that Silicon Valley was ‘an extremely left-leaning place,’ according to Breitbart.com, which is among the conservative outlets whose engagement dropped after Facebook tweaked its news feed algorithm. “[What] I try to root out in the company is making sure we don’t have any bias in the work we do, and I think it is a fair concern that people would wonder about,” Zuckerberg told Cruz. Plenty to follow up with this comment. If only they had.

During the House hearing, Marsha Blackburn (R-TN), questioned Zuckerberg: “Do you subjectively manipulate your algorithms to prioritize or censor speech?”

“Congresswoman, we don’t think what we are doing is censoring speech, I think there are types of content like terrorism which I think we all agree we don’t want to have on our service, so we build a system that can identify those and can remove that content and we’re very proud of that work.”

Blackburn took Zuckerberg to task saying; “let me tell you something right now, Diamond and Silk is not terrorism.”

Zuckerberg would later call the suppression of their page a mistake. But the chilling effect on their speech doesn’t feel like a mistake. It may not feel like suppression to Zuckerberg, but it is suppression of speech. These kinds of tactics used to have civil libertarians in newsrooms and on both sides of the political spectrum up at arms.

After taking in much of the coverage this week, the consensus by all sides of the political spectrum appears to be: The House hearing Wednesday was much more substantive than the Senate hearing in getting into some of the issues about Facebook’s transparency as it monetizes users’ data.

But we’ve only begun to address the issues of censorship and suppression of speech. The question may come down to this: Who’s First Amendment rights are more important?

Zuckerberg may have given lip-service to the idea of providing a neutral platform to all users, but as one outlet pointed out, not one Democratic Senator or House member complained to Zuckerberg about their pages or side of the aisle finding their pages or engagement suppressed.

Whether you read The Daily Kos or The Daily Caller, that should be of concern to anyone who understands and appreciates the uniqueness of the First Amendment in the world. We are the only country that guarantees this right. But as the hearings showed us, it is up to citizens to protect it.

 

Congress Gets a Privacy Date with Facebook’s Zuck

Congress Gets a Privacy Date with Facebook’s Zuck

Facebook CEO Mark Zuckerberg will face the House Energy and Commerce Committee next week to answer questions about the platform’s practices with users’ data. Apparently, he’s concluded that testifying to Congress is the right thing to do when your company is under sustained fire over its customer data practices and how it chooses what users see on its platform.

“The hearing — set before the House Energy and Commerce Committee on the morning of April 11 — could result in an uncomfortable grilling from Democrats and Republicans who feel the social giant is responsible for everything from fake news to online extremism,” according to the WashingtonPost.com.

The news comes as Facebook announced that data on up to 87 million of its users had been shared “improperly” with Cambridge Analytica, a political consulting firm that President Trump’s campaign once worked with, up from the 50 million figure it previously cited.

Other requests are still pending, such as the Senate Judiciary Committee invite and the Senate Commerce committee. Reuters has reported, citing anonymous sourcing, that Zuckerberg is expected to testify at the Senate Judiciary Committee hearing.

No word yet on whether the House panel plans to live-stream the hearing on Facebook.

Via Reuters: “This hearing will be an important opportunity to shed light on critical consumer data privacy issues and help all Americans better understand what happens to their personal information online,” the panel’s Republican chairman Greg Walden and top Democrat Frank Pallone said in a statement.

The hearing date should also be an opportunity to elevate the growing concern in tech and media circles about the power and behavior of Facebook to influence how its users consume information on the platform, which counts 2.2 billion users worldwide.

It thinks of itself as a platform provider for connecting people rather than a news and information publisher, despite research that shows millions of Americans get a portion of their daily news on the platform.

And that may help it remain shielded by Section 230 of the Communications Decency Act, which is part of the 1996 Telecommunications Act. A key provision of “Section 230” says:

“No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.”

That is the shield that critics say allows Facebook, Twitter, Google, YouTube and many other content platforms to act every bit as publishers, but not have to answer questions about their practices with user’s content or how they treat content from outlets such as Breitbart, which has been critical of Facebook’s practices and has questioned its treatment of conservative-leaning publications.

Next week’s hearing (and perhaps hearings) will likely delve into what users “opt-in” for when they sign up for Facebook’s connection service. They will likely grill Zuckerberg (and anyone he may bring with him from legal) Facebook’s policies with that data, what users can “opt out” of and how it shares our info with third-party vendors and advertisers.

For now at least, one House panel has scheduled Zuckerberg to testify about its data and privacy policies. A Facebook spokesperson told Reuters they are working on the other scheduling invites.

Clearly, Zuckerberg has concluded that showing up when Congress invites you to testify makes sense, even though he turned down British lawmakers’ similar requests.

Who’s betting he may forego the usual t-shirt for a tie and jacket? It might help him look a little more grown-up as the leader of a company whose practices with users’ data, algorithms and lax policies to police its platform until recently have placed it under fire among lawmakers from both sides of the aisle, investors, consumer watchdogs and its own user base.

(Updates prior version to include Facebook’s update of how many users’s data it estimates were shared with third parties.)

Privacy Panel to Question Facebook’s CEO

Privacy Panel to Question Facebook’s CEO

Facebook CEO Mark Zuckerberg has said he would be “happy” to testify before Congress about Facebook’s data privacy after revelations that it let third parties work with data on millions of its users for years, in potential violation of its own data privacy rules. He’ll have his chance on the week of April 10.

Reuters reports that Zuckerberg will be showing up to testify to the judiciary committee after Chairman Sen. Chuck Grassley (R-IA) invited Zuckerberg and the CEOs of Google and Twitter to answer questions regarding data privacy. (According to TheHill.com, “other committees including Senate Commerce and House Energy and Commerce have invited Zuckerberg to testify before their committees as well.”)

The question list keeps growing. Buzzfeed’s scoop this week laid out and laid bare a high-level Facebook executive’s thoughts on the company’s mission of connecting people — no matter the downside, which he wrote in 2016 following a live-streamed shooting death of a Chicago man.

“We connect people. Period. That’s why all the work we do in growth is justified. All the questionable contact importing practices. All the subtle language that helps people stay searchable by friends. All of the work we do to bring more communication in. The work we will likely have to do in China some day. All of it,” VP Andrew “Boz” Bosworth wrote.

“So we connect more people,” he wrote in another section of the memo. “That can be bad if they make it negative. Maybe it costs someone a life by exposing someone to bullies.

“Maybe someone dies in a terrorist attack coordinated on our tools.”

Zuckerberg has since said publicly that he doesn’t agree with Bosworth’s memo. But it is likely to form the basis for many questions the tech executives will be asked when (as Reuters reports) he sits down before the Senate judiciary committee.

They may want to hear more about how affiliates target Facebook users with ads after reading Bloomberg’s piece detailing affiliates’ use of the Facebook network:

“Granted anonymity, affiliates were happy to detail their tricks. They told me that Facebook had revolutionized scamming. The company built tools with its trove of user data that made it the go-to platform for big brands. Affiliates hijacked them. Facebook’s targeting algorithm is so powerful, they said, they don’t need to identify suckers themselves—Facebook does it automatically. And they boasted that Russia’s dezinformatsiya agents were using tactics their community had pioneered.

“The company does make efforts to rein in these scams,” Boomberg’s Justin Fox wrote in a column about the piece — and asking whether a new form of ownership might help Facebook’s PR problems. “But they appear to be under-resourced and more than a little conflicted. Its representatives were so prominent at the affiliate marketers’ event that, as Bloomberg put it, “a newcomer could be forgiven for wondering if it was somehow sponsored by Facebook.”

Fox continues, “Facebook users like you and me are the company’s raw material, not its customers and we are treated accordingly.”

 “And while this is to an extent true of lots and lots of other online businesses and some offline ones, at a social network it somehow feels worse. Alphabet Inc. subsidiary Google offers discrete services such as search, maps and email in exchange for its privacy intrusions.

“What Facebook offers users is simply, along with some incidental photo and video storage, connection to other users. The Axios-SurveyMonkey poll released earlier this week that showed Facebook (and rival social network Twitter Inc.) with far lower favorability ratings than Google, Apple Inc., Amazon.com Inc. and even controversy-plagued Uber Technologies Inc. indicates that those users can sense the difference.”

Investors knocked $95 billion (about 18 percent) off its market capitalization in the past week. The Federal Trade Commission confirmed it is probing whether Facebook is observing a 2011 consent agreement that mandated a clear policy of privacy protections with its data.

So some of the questions we may hear Senators ask Zuckerberg, and his counterparts at Google and Twitter for that matter:

What has changed about your policies with your 2.2 billion users’ data in 2012 and now?

How do you oversee how third-party affiliates place advertisements on the platform?

Given how much information you publish across the platform, and the editorial decisions you make about what the users see and don’t see, how are you not a media company?

Despite Facebook’s Latest Mea Culpa on Your Data, It has a ‘Section 230’ Problem

Despite Facebook’s Latest Mea Culpa on Your Data, It has a ‘Section 230’ Problem

Facebook to world: Sorry. World to Facebook: Doesn’t cut it.

Facebook news has become a cottage industry of bad PR headlines since the revelation that the company’s leaky data-sharing policies also extended to user data that it let an academic researcher pull from the platform, which then reportedly let U.K. data analytics company Cambridge Analytica look it over and could reportedly involve some 50 million users. Not a lot of this is clear, other than it came from one former CA employee.

Cambridge Analytica at one time worked with the Trump campaign, which used social media quite effectively during the 2016 campaign to communicate with supporters. All of this is routine in campaigns. Many in the media celebrated when the Obama campaign extracted Facebook data on millions of its users in 2012 to target voters. But this is the Trump era, so the opposition media fanned another bonfire.

Except one could argue that this one didn’t need much of a spark to light it up, given how many problems are stacking up over Big Tech and Facebook in particular. And it may have implications for Section 230 of the Communications Decency Act (CDA), the law that gave rise to Facebook and other social media platforms and shields them from being treated as publishers, even though they are major distributors of news these days.

After a week of headlines over the furor, with Facebook’s investors shaving nearly $50 billion in value from the company’s $500-billion market valuation, on Sunday the saga turned to full-page ad apologies in major newspapers’ print editions such as the Wall Street Journal, New York Times and the U.K.’s Daily Mail.

According to TheHill.com, CEO Mark Zuckerberg took out the ads promising to “do better,” after the data harvesting uproar.

“You may have heard about a quiz app built by a university researcher that leaked Facebook data of millions of people in 2014. This was a breach of trust, and I’m sorry we didn’t do more at the time,” Zuckerberg wrote. “We’re now taking steps to make sure this doesn’t happen again.”

“Thank you for believing in this community. I promise to do better for you,” the message concludes.

His parsed his words. The issue may have been a breach in trust, but it wasn’t a data breach. Facebook let the researcher have the data. Cambridge Analytica has said it is reviewing its practices since the issue came up (which was followed by UK government officials staging a rather over-the-top raid on the company over the issue).

The ads cap a tumultuous week that saw Zuckerberg and Facebook buffeted by ill winds from all points along the political spectrum.

Democrats and Republicans are mad about how the Facebook platform sold ads to Russians during the 2016 elections, and that it doesn’t do enough to police the fake news that proliferate across its platform.

Republican lawmakers, like Democrats, are also requesting Zuckerberg come to Washington and answer more questions about its data-sharing practices.

And free-speech advocates, especially conservatives, are crying foul over clear evidence that Facebook’s recent algorithm changes have resulted in much lower traffic and engagement numbers of conservative sites such as Breitbart news and a 45 percent drop in engagement with President Trump’s Facebook posts.  The same algorithm changes are registering nary a nudge on left-leaning sites’ traffic.

It keeps going. The Federal Trade Commission is looking into whether Facebook lived up to a consent decree it signed in 2011 promising it would behave better with user’s data. According to the proposed settlement, Facebook is required to “take several steps to make sure it lives up to its promises in the future, including giving consumers clear and prominent notice and obtaining consumers’ express consent before their information is shared beyond the privacy settings they have established.”

And now this: Tech journalist Sean Gallagher, writing for ArsTechnica, has documented how “Facebook also had about two years’ worth of phone call metadata from [a user’s] Android phone, including names, phone numbers, and the length of each call made or received.” (Gallagher updated his story late Sunday to note Facebook’s response to how it collected info about Android phone calls and SMS data on some users.)

But as a WSJ editorial noted, all of this “despair over the Trump campaign and Facebook has had an incidental benefit: People are finally realizing that the sprawling social network isn’t merely a place to share cat photos. Facebook is the world’s biggest media conglomerate, depository of consumer data and communications network.”

The European Commission is looking at Google and Facebook’s data practices that turn the whole opt-out concept of how your data is used all the way around. According to The New York Times:

In May, the European Union is instituting a comprehensive new privacy law, called the General Data Protection Regulation. The new rules treat personal data as proprietary, owned by an individual, and any use of that data must be accompanied by permission — opting in rather than opting out — after receiving a request written in clear language, not legalese.

Which brings us to the oft-cited Section 230 of the Communications Decency Act, part of the 1996 Telecommunications act that re-ordered many rules for media and mergers for years to come in an effort to promote new forms of communications for consumers.

The CDA was designed to shield tech start-ups from liability for user-generated content – such as the comments from users about articles. Many theories hold that Google, Facebook, YouTube and other content-sharing and content-finding platforms wouldn’t have thrived if users were allowed to sue them for defamatory statements that users post. Section 230 of the CDA makes the U.S. unique in the world regarding a hands-off approach from government over online speech.

But in an era of increasing frustration with the Big Tech players who control how we find information and how much of it we see in our news feeds, Section 230 may be up for even more changes than ones passed this week. The WSJ notes:

The Senate passed legislation this [past] week that exempts sex-trafficking from Section 230, and several Senators have threatened more changes if tech companies don’t clean up their act. The Federal Trade Commission is investigating Facebook’s privacy protections, and Mr. Zuckerberg has said he’s open to more regulation. But it would be far better for Facebook to take more responsibility for its content than for politicians and bureaucrats to do so.”

The changes proposed by the Senate, and headed for the President’s desk, are aimed at cracking down on websites that clearly promote the exploitation of child prostitution. After initially resisting the bill, the Internet Association, a lobbying group that includes Google and Facebook, supported the legislation.

As NPR notes in a comprehensive story looking at how the changes to Section 230 have already upended the rules for the big platform providers, the important words in the federal code are:

“No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.”

But Section 230 is also tied to some of the worst stuff on the Internet, protecting sites when they host revenge porn, extremely gruesome videos or violent death threats. The broad leeway given to Internet companies represents “power without responsibility,” Georgetown University law professor Rebecca Tushnet wrote in an oft-cited paper.

“We’re at an inflection point, when the great wave of optimism about tech is giving way to growing alarm,” said Heather Grabbe, director of the Open Society European Policy Institute, in a NYT article about the EU’s data privacy plans with Facebook and Google in mind. “This is the moment when Europeans turn to the state for protection and answers, and are less likely than Americans to rely on the market to sort out imbalances.”

Section 230 of the CDA is unique because it protects online sharing platforms from being treated as publishers even if they police — edit, if you will — the content of their content sharing sites, such as removing defamatory material and enforcing their own online community standards for posting.

But that’s where the companies are creating new problems for speech in general, and online speech in particular.

As noted above, Facebook’s policies with its platform, such as the new algorithm change in January,  resulted in significant drop in engagement for Trump pages and conservative outlets.

Google is facing lawsuits over its censorship of conservative points of view on its YouTube platform and for firing an engineer over a memo questioning its “ideological echo chamber” in its workplace culture. That culture finds its way into how search results are treated.

It is a major benefactor of Democratic politicians, then decides that it will start “fact checking” right-leaning publications such as The Daily Caller, while virtually ignoring leftists’ sites.

So the same features of Section 230 that protect these companies from being treated like publishers, as they police their own content, is creating content policing of another sort: the suppression of a free exchange of ideas by political points of view the companies don’t like as a matter of policy.

And in case you weren’t following Facebook’s behavior on other shores around the world, Casey Newton of TheVerge, which is sympathetic to Facebook’s lefty culture, rounded up a few, noting that, in March alone:

-Facebook, Instagram, and WhatsApp were forced to shut down temporarily in Sri Lankaafter inflammatory messages posted to the service incited mob violence against the country’s Muslim minority.

–United Nations investigators blamed Facebook for spreading hate speech that incited violence against the Rohingya minority in Myanmar.

–The Facebook search bar briefly auto-filled its search bar with suggestions for porn.

–A far-right Italian politician credited Facebook with his party’s surprising electoral victory, after reports that Russian state media used the platform to promote stories suggesting Italy faced an immigration crisis.

[Italy does have a crisis.]

–Facebook banned far-right group Britain First, which had more than 2 million followers, for inciting violence against minorities.

[Quick note: In the U.K., where a bad joke can get its citizens’ version of free speech curtailed, it’s hard to know how reactionary the platform was to this group compared to its tolerance of far-left groups whose rhetoric is no less offensive to many.]

–Facebook’s chief security officer is quitting after reportedly arguing too forcefully that the company should investigate and disclose Russian activity on the platform.

Section 230 of the CDA has a problem, reports Wired.

And Facebook itself may have a Section 230 problem if regulators step in, which carries very big implications for how we communicate and share ideas in a 21st Century democracy built on open expression.

The problem is, a lot of it this problem has been created by the very tech giants who have benefited from the CDA the most.

Tech entrepreneur Scott Galloway, writing in Esquire, sums up a solution that is gaining currency in Washington, the finance world, academia and media:  It is time to break up the Big Four of tech: Amazon, Google, Apple and Facebook so that new companies can innovate — and a marketplace of ideas necessary to feed that innovation can breathe again.

(Updated Monday, March 26, 2018 to clarify that many of the details on Facebook’s third party data sharing practices are not clear and hard to verify, and to add links to Gallagher’s article on Facebook and Android phone data, and Galloway’s Esquire article. It’s pretty much a major update to the piece. –The Management)

Where Was That Crack Before FIU Pedestrian Bridge Collapse?

Where Was That Crack Before FIU Pedestrian Bridge Collapse?

Where was the crack that an engineer reported to the construction crew working on the pedestrian bridge that collapsed at Miami’s Florida International University?

Now that emergency responders have removed the six victims who were trapped under the bridge when it fell, the investigation is moving into higher gear.

Given the news that an engineer working on the project had reported a crack in the concrete prior to the collapse — albeit noting it wasn’t a life-safety issue, a key question will be whether the crack led to the bridge failure.

Watching the video from a nearby driver’s dash cam (posted farther down), which shows the minute the bridge collapsed, you can see a section near the left giving way, pulling the rest of the structure down with it.

As the NYTimes.com reported, two days before the collapse, “an engineer on the project left a voice mail message for the Transportation Department about ‘some cracking that’s been observed on the north end’ of the bridge, according to a recording from the department released on Friday. At both the meeting and in his message, [the engineer] said the cracking did not present any safety issues.” The story continues:

Construction crews were working on a diagonal beam at the north end of the structure at or about the time of the collapse, according to information the National Transportation Safety Board provided to local members of Congress. Workers were tightening cables that ran inside the beam.
Such adjustments, which engineers call “post-tensioning,” are common in concrete designs to fine-tune the structure once it is in place. In this case, however, it was not clear whether the cable-tightening was routine or an urgent undertaking in response to the discovery of the crack in the bridge.
Witnesses said the collapse appeared to start near the north end. But no one, including the N.T.S.B., has so far placed any blame for the collapse on the cables or cable-tightening work.

Florida Sen. Marco Rubio (R), in a post on Twitter on March 15th, the day of the collapse, said the “cables that suspend the bridge had loosened & the engineering firm ordered that they be tightened. They were being tightened when it collapsed today.”

A few things about concrete. Small cracks are common, given its properties. As most engineers will explain,  concrete has weak tensile strength, which is why we have rebar, reinforcing steel added to help improve its ability to withstand more compression and load-bearing stress.

Clearly, load-bearing stress led to the bridge failure. It is early yet in the probe. But watching the video provides visual clues that suggest the extent of that reported crack — and how crews addressed it — will be a major question to be answered.

Marco Rubio’s tweet:

FIU’s Pedestrian Bridge Collapse Probe, ABC and Safety

FIU’s Pedestrian Bridge Collapse Probe, ABC and Safety

After the 950-ton pedestrian bridge collapse at Miami’s Florida International University Thursday, news reports are counting between six and seven fatalities so far and scores of injuries since the overpass walkway pancaked on the six-lane highway below.

Aerial view, via AP, of the pedestrian bridge at Florida International University in Miami that collapsed on March 15.

Aerial view, via AP, of the pedestrian bridge at Florida International University in Miami that collapsed on March 15.

The devastating scene soon after the collapse still speaks for itself. The bridge builders used accelerated bridge construction (ABC) techniques, an approach that has been spreading in heavy construction projects that are often hampered by hidebound procedures. But clearly, something went very wrong and is bound to put the builders’ ABC techniques and safety records under scrutiny.

From a safety perspective, college campuses rate as among the more difficult areas for construction projects and layout planning, for fairly simple reasons. Constructors have to work around tight spaces with cranes and heavy equipment, erect scaffolding and cordon off live construction zones and all the hazards they hold to accommodate the heavy foot-traffic of students and faculty nearby. It’s not unlike the challenge of building in New York city.

According to reports from bystanders and news outlets, the walkway had not opened to pedestrian traffic after its completion this past Saturday.

Miami New Times reports that two of the biggest firms that built the pedestrian bridge “have recently been accused of unsafe practices. In one of those cases, another bridge project toppled onto workers.”

The Miami Herald’s report looks at accelerated bridge construction and puts the innovative approach into some context:

The unfinished pedestrian overpass that toppled onto the Tamiami Trail on Thursday was being built under a relatively novel approach called accelerated bridge construction — a fast, tested method that carries some risks if not rigorously carried out.

Until it’s fully secured, a quick-build structure is unstable and requires the utmost precision as construction continues. Properly shoring up the bridge can take weeks, a period during which even small mistakes can compound and cause a partial or total collapse, said Amjad Aref, a researcher at University at Buffalo’s Institute of Bridge Engineering.

As CBSLocal reported on March 10, the builders used ABC techniques to reduce risks to workers, commuters and pedestrians, while preventing traffic jams in the area.

The move was the largest pedestrian bridge move via Self-Propelled Modular Transportation, in U.S. history.

The National Transportation Safety Board (NTSB) is looking into the accident, as are the Occupational Safety and Health Administration (OSHA) and engineering groups of many disciplines (structural, civil, for example) to figure out what went so horribly wrong.

At the very least, the investigation is bound to result in some changes in ABC procedures if it turns out speed or pressure to rush testing may have overwhelmed structural tests of the bridge’s integrity during the critical phases of swinging the key load bearing sections into place.  WBZ’s footage below is from soon after the collapse Thursday:

 

Infrastructure Plans in Need of Finance Ideas

Infrastructure Plans in Need of Finance Ideas

President Donald Trump is set to highlight an infrastructure plan among the topics he’s expected to bring up during his first State of the Union address on Tuesday, January 30th.

In the meantime, sources are floating trial balloons in the political press detailing the early phases to gage support for alternative funding ideas.

Politico, a reliable publication for how Democrats in Congress are thinking, is calling the $1 trillion, 10-year blueprint to rebuild America a “Game of Thrones” plan because of the funding realities facing both parties:

 “Instead of the grand, New Deal-style public works program that Trump’s eye-popping price tag implies, Democratic lawmakers and mayors fear the plan would set up a vicious, zero-sum scramble for a relatively meager amount of federal cash — while forcing cities and states to scrounge up more of their own money, bringing a surge of privately financed toll roads, and shredding regulations in the name of building projects faster.”

According to TheHill.com, whose reporting on the subject brings in more Republican sources, the “idea is to use $200 billion in federal seed money to create $1 trillion worth of overall infrastructure investment by raising revenues from the private sector and local governments.”

Politico’s report adds this:

“The federal share of the decade-long program would be $200 billion, a sum Trump himself concedes is “not a large amount.” The White House contends it would lure a far larger pool of state, local and private money off the sidelines, steering as much as $1.8 trillion to needs as diverse as highways, rural broadband service, drinking water systems and veterans hospitals. (Maybe even commercial spaceflight, one recently leaked draft suggests.)

The reality is there’s not enough support for a big, transformational package to be passed out of Congress so less may be more to get it done. The United States is $20 trillion in debt and Republicans are in no mood to hike the federal gas tax after passing a $1.5 trillion tax cut.

Further complicating matters, adds TheHill.com, “is that Republicans are insisting that the infrastructure proposal be fully paid for — a demand that Democrats are sure to highlight as hypocritical, given that the GOP tax-cut bill was projected to add over $1 trillion to the deficit.”

Alternative funding has been a buzzword in the private sector for years and it’s likely to at least get a fair-minded look among lawmakers.

The plan’s outline signaled as much when it showed up in media reports this past week (here’s the pdf: Trump-Infrastructure-Plan-Outline-1). It touts an Infrastructure Incentives Initiative that “encourages state, local and private investment in core infrastructure by providing incentives in the form of grants. Federal incentive funds will be conditioned on achieving milestones within an identified timeframe.”

The grant formulas are up for debate, as locals raise their own funds for projects that qualify.

Which brings us back to the federal highway tax. Congress may not be so keen to raise it because states are already doing so to pay for highway and road repairs.

As of July of 2017, 26 states have raised taxes on motor fuels in the past four years, according to Pew Research. “The eight states that raised taxes this year include Tennessee and South Carolina, deep-red states dominated by fiscal conservatives.”

States are also grappling with the fact that today’s cars and trucks can drive for longer distances on less fuel, and a small but growing number of vehicles don’t run on gasoline at all. Six of the eight states that raised the gas tax [in 2017]  also raised some other vehicle fees and imposed others, including new $100-$150 registration fees for electric vehicles.

The administration’s plan recommends removing “constraints” currently in place on public-private partnerships for transit systems, including a federal ban that prohibits tolling on existing interstate highways, adds TheHill.com.

Public private partnerships, or P3s, as they’re known in the construction world, have gained favor in the U.S. in the past few years since the Great Recession of 2008 put the stops on a lot of traditional publicly funded projects in construction.

Canada practically wrote the book on P3s with good reason. It’s a more centralized economy and its 10 provinces lend itself to a templated approach to P3s. It’s not as easy with America’s 50 states and entrenched public union interests that don’t want to cede control to private outfits.

But the precarious financial positions of many states are changing attitudes. Plenty of Canadian firms with operations in the U.S. such as PCL and Flatiron Corp. have been active in the U.S.-market, guiding firms and the public through the concessionaire process when private entities get involved with managing public infrastructure.

Some 33 states currently have enabling legislation for P3s on their books and other legislatures are considering. Highway projects, however, can get tricky. People generally don’t like to pay the tolls and will look for ways to avoid them if they can.

Bloomberg notes that, “for projects that don’t have built-in revenue streams, governments can make what are known as availability payments, akin to rent-to-own arrangements. These can include “shadow tolls”—per-car fees paid by the state rather than drivers.

“In such deals, the details can make all the difference. The South Bay Expressway in San Diego is one of several U.S. P3s operating tolls that filed for bankruptcy after revenue came in lower than projected. In 2008, Chicago leased 36,000 parking meters for 75 years to an investor group led by Morgan Stanley in return for $1.1 billion. The city’s inspector general later concluded that, in its rush to plug a short-term budget gap, the city undersold the rights by almost $1 billion, infuriating residents.

Municipal water projects, on the other hand, have seen some success with P3s, given the stability of the long-term payments that follow the completion of a modernization project.

The Bayonne, N.J., municipal water system, hard hit after Superstorm Sandy in 2012, has become one such study, according to a report by the Wharton School of Business at the University of Pennsylvania.

Among the city’s many challenges: “pumping an average of 8.3 million gallons of wastewater daily, and outdated infrastructure and outfalls that needed updating to meet federal regulations.” Like so many states and municipalities across this great land, excessive debt obligations made a hash of its credit rating, raising the cost of borrowing for the city.

“The Bayonne Municipal Utilities Authority (BMUA) needed a solution. Its options included selling its water utilities outright to a private company, or entering into either an operation-and-maintenance contract or a longer-term concession agreement,” the report says. “Only a few months after Sandy, the city chose the latter avenue — a joint venture partnership for both water and wastewater operations with Kohlberg Kravis Roberts (KKR) funding 90% of the effort with United Water, a unit of French giant Suez Environnement S.A.” (The full Wharton report, including other successful P3s, is here.)

Not every project is P3 material. But for projects with the right stuff, private capital is flowing toward infrastructure funds and looking for deals.

Engineering and construction giant AECOM raised its own $3.5 billion infrastructure fund in 2017. Meanwhile, ConstructionDive.com adds, the company sent the Treasury Department a $200-billion list of water and infrastructure projects that it says will have an economic impact of up to $1.3 trillion.

As of Q1 2017, total assets under management by private infrastructure funds were US$426 billion, AECOM says. “On the supply side, several US$10 billion-plus funds have been raised or are presently being marketed.”

AECOM’s pitch is this: “Cash flows from infrastructure assets are reasonably predictable, of long duration, somewhat indexed to inflation, and relatively uncorrelated with public equity markets, all of which makes them a good match for the liabilities of life insurers and pension plans, and for the permanent capital of sovereign funds. For an indication of the possible magnitude of capital that could be directed to infrastructure investing, it is worth noting that U.S. public pension plans, corporate pension plans and life insurers hold assets of US$4.2 trillion,13 US$1.5 trillion, and US$6.8 trillion.”

That’s a lot of funds looking for stable, reliable revenue. Still, P3s bring up all kinds of issues about who gets stuck with the risk long-term, which is the name of the game in construction,  and the public can be leery.

As the Wharton study from a group critical of the Bayonne P3 project notes, “private equity players typically focus on short-term profits and may seek to flip assets after driving down service quality and driving up prices. That means households and businesses could end up paying more for inferior service.”

Contract documents, as always, are the key here.

At least Republicans and Democrats agree that some kind of infrastructure package would help the nation re-build and refurbish some of its critical infrastructure.

Meanwhile, the trial balloons the administration floated on the plans have at least kicked off some bickering and back and forth among lawmakers to signal what’s possible as the President readies his State of the Union address.  Up, up and away.

Alexa and AI at CES, in Our Cars and Ovens

Alexa and AI at CES, in Our Cars and Ovens

Ina Fried of Axios Login has an enviable and fun gig this week, covering the annual Consumer Electronics Show in Las Vegas where the latest hot tech is rolled out.

It’s good to read tech reporters who bring institutional memory to their coverage. They bring a much-needed cool to the hot type.

“While the biggest tech breakthroughs probably won’t show up at the CES,” Fried writes, “it’s a good place to see where the industry as a whole is placing its bets.”

The big bet is (still) voice assistants and artificial intelligence, everywhere:

“The big trend: The integration of voice assistants into all kinds of consumer electronics gear, from your TV to your fridge.”

It takes two forms:

It’s a fierce battle between Amazon and Google to get their assistants included on other companies’ devices. 

As the same time, hardware makers including Samsung, LG and Roku are putting their own voice assistants into their products.”

Another area to watch, Fried adds, is the speed with which voice-activated assistants are finding their way into TVs and cars and cooking appliances and bathroom fixtures.

“Bixby, for example, is being added to Samsung’s Family Hub refrigerator, while Amazon’s Alexa is coming to ovens and microwaves.”

Wired’s CES curtain-raiser has seen it all before, most of it anyway:

Every year, more than a hundred thousand CES attendees pour into Las Vegas to convince each other and the world that everything before was crap and everything to come will change that. They go to see the biggest and thinnest new TVs, the fastest and lightest new laptops, the headphones and the phone cases and the drones and the refrigerators. All of it more powerful than last year’s model, more connected, more deeply integrated into your everyday life.

David Pierce’s article doesn’t overlook the ongoing spread of augmented and virtual reality to more areas of consumer devices, self-driving cars and “all things artificial intelligence.”

“Each of these will re-shape our lives in ways we don’t yet understand,” he writes. “Neither do the tech companies.”

And take heart, people with grey hair. The show has plenty of tech for you and your influential, disposable income. Gizmodo.com reports that this year, the best gadgets could be the ones designed for seniors.

A French startup called E-Vone has created a line of custom shoes and sneakers packed with a host of sensors including an accelerometer, a pressure sensor, a gyroscope, and GPS, that all work together to not only detect falls, but also notify friends and family of an incident.

So never again will they have fallen and can’t get up.  They will bounce back:

“Even more ambitious is a wearable product called the Hip’Air that features airbags hidden on either side of a special belt. Using a gyroscope and accelerometer, the airbags automatically inflate in less than 0.08-seconds when the motions of a fall are detected, and then cushion the impact to help reduce the risk of broken bones and other serious injuries.”

2018 is the year of artificial intelligence (AI) becoming more robust, smarter and everywhere. It’s baked into sensors that are transforming the Internet of Things (IoT) and accelerating major changes in manufacturing. AI will be with us throughout CES and for the rest of our lives.

When Sensors Met Artificial Intelligence

When Sensors Met Artificial Intelligence

I used to think that 2014 was the year that Artificial Intelligence crested in the public’s awareness with the release of Amazon’s voice-activated assistant, Alexa, and others like it.

The cylinder with a little bit of backtalk and a lot of listening to its user’s questions heralded the arrival of a form of AI, albeit in what is known as “narrow” AI – a set of decision-tree answers. But the Alexas of the world are fast-learners and gaining.

Every year is about AI now, especially as AI merges into embedded sensors in all kinds of infrastructure.

By all accounts, 2017 was a land-grab year for AI players after all the funding AI companies got in 2016.

According to Gartner’s Top Tech Trends for 2018:

  • CB Insights reports that more than 550 startups that use AI as their core product raised $5 billion in funding in 2016. There were also 658 deals in 2016.
  • Venture Scanner says it’s tracking 1,852 AI companies — 940 of them funded — in 13 categories and 70 countries. It says those companies have raised total funding of $16.8 billion.
  • TechSci Research projects, in a June 2016 report, that the AI market will grow at a compound annual rate of 75% between 2016 and 2021.

Look for big software players such as Microsoft to bake in more AI in Office 365, the online version of the traditional Microsoft Office suite of productivity tools.

If you want to understand how fast AI is spreading into software and embedded hardware systems that we rely on in our critical infrastructure, keep an eye on the maturity of predictive analytics, ensemble learning and natural language processing.

It’s not just AI as a major trend. It’s what AI is marrying up with in this latest phase of development, such as Internet of Things (IoT) sensors collecting data and pumping it into AI software. This will absolutely transform manufacturing and product lifecycle management (PLM) across many sectors in our economy.

Gartner’s trend report says:

“As people, places, processes and “things” become increasingly digitalized, they will be represented by digital twins. This will provide fertile ground for new event-driven business processes and digitally enabled business models and ecosystems.

“The way we interact with technology will undergo a radical transformation over the next five to 10 years. Conversational platforms, augmented reality, virtual reality and mixed reality will provide more natural and immersive interactions with the digital world.”

IBM’s Chris O’Connor talks through the concept in a simple but detailed explanation.

So that’s my Big Trend to Watch in 2018, which, I hope, makes me blogger-compliant for January.

Here’s a digital twin demo by Colin Parris of GE’s software division:

An Afflicted News Media in the Trump Era

Arthur Gregg Sulzberger, the 37-year-old publisher of the New York Times, who just took the reins from his father Arthur Ochs Sulzberger Jr., posted a New Year’s Day op-ed about the urgency of his mission and challenges the news operation faces.

“The business model that long supported the hard and expensive work of original reporting is eroding,” he wrote in the front page piece, “forcing news organizations of all shapes and sizes to cut their reporting staffs and scale back their ambitions.”

Here’s what Times editors might call the nut graph:

“Misinformation is rising and trust in the media is declining as technology platforms elevate clickbait, rumor and propaganda over real journalism, and politicians jockey for advantage by inflaming suspicion of the press.”

Sulzberger the younger might want to ponder the NYT’s own role in running with political narratives that create more polarization among the citizens it serves.

For more on that, we turn to the byzantine details behind the special counsel probe into whether the Trump campaign colluded with Russia during the campaign, or whatever it is they’re looking into. Former federal prosecutor Andrew McCarthy, writing in National Review, breaks down the latest  NYT story on this narrative, and its flimsy sourcing:

“Seven months after throwing [Trump campaign affiliate] Carter Page as fuel on the collusion fire lit by then-FBI director James Comey’s stunning public disclosure that the Bureau was investigating possible Trump campaign “coordination” in Russia’s election meddling, the Gray Lady now says: Never mind. We’re onto Collusion 2.0, in which it is George Papadopoulos — then a 28-year-old whose idea of résumé enhancement was to feign participation in the Model U.N. — who triggered the FBI’s massive probe by . . . wait for it . . . a night of boozy blather in London.”

“Well, it turns out the Page angle and thus the collusion narrative itself is beset by an Obama-administration scandal: Slowly but surely, it has emerged that the Justice Department and FBI very likely targeted Page because of the Steele dossier, a Clinton-campaign opposition-research screed disguised as intelligence reporting. Increasingly, it appears that the Bureau failed to verify Steele’s allegations before the DOJ used some of them to bolster an application for a spying warrant from the FISA court (i.e., the Foreign Intelligence Surveillance Court).”

Why isn’t the NYT interested in whether a government entity gained a spy warrant, and the ability to spy on its political opponents, using opposition research (also known as propaganda)?

This, in the view of many Americans is a “dangerous confluence of forces” that Sulzberger refers to in his op-ed that threatens “the press’s central role in helping people understand and engage with the world around them.”

The Daily Wire sums up some of the rogues’ gallery of media errors in the marketplace of ideas in 2017:

On February 14, Michael S. Schmidt, Mark Mazzetti, and Matt Apuzzo reported in The New York Times, “Trump Campaign Aides Had Repeated Contacts With Russian Intelligence.” The Gray Lady was subsequently humiliated when former FBI director James Comey testified before the Senate Intelligence Committee on the story, saying, “In the main, it was not true.

On November 22, Gabriel Sherman reported in New York Magazine that “a group of prominent computer scientists and election lawyers” demanded a recount in three states because of “persuasive evidence that results in Wisconsin, Michigan, and Pennsylvania may have been manipulated or hacked.” Writers from Politico, Reuters, MSNBC, and The New York Times all shared the story. But as Nate Silver pointed out the next next, “Anyone making allegations of a possible massive electoral hack should provide proof, and we can’t find any.” Further, the New York Magazine piece had even misrepresented the computer scientists’ argument.

On December 1, Lorraine Woellert falsely claimed in Politico that Treasury Secretary Steve Mnuchin had once overseen a company that “foreclosed on a 90-year-old woman after a 27-cent payment error.” The story, which was shared by writers from The New York Times, NBC News, Huffington Post, Vanity Fair, New York Post, and the Associated Press, had just one problem: it was entirely false. The woman was never foreclosed on, she never lost her home, and it wasn’t even Mnuchin’s bank that brought the suit.

On December 1, ABC News reported that during the 2016 presidential campaign, President Trump ordered Lt. Gen. Michael Flynn to contact Russian officials in violation of the Logan Act. That story, based on anonymous sources, turned out to be entirely false. ABC News later “clarified” the report and suspended “journalist” Brian Ross. [The stock market also fell on the news.]

On June 6, CNN falsely reported that then-FBI director James Comey refuted President Trump’s claim of having been told multiple times that he was not under FBI investigation. The correction reads, “The article and headline have been corrected to reflect that Comey does not directly dispute that Trump was told multiple times he was not under investigation in his prepared testimony released after this story was published.

CNN’s coverage of Trump’s first 100 days as president was ranked among the most negative of most of the major cable news outlets, according to the Harvard Shorenstein public policy center study.

CNN’s urgency, its zeal to report opposition to Trump has resulted in a string of embarrassing errors, corrections and retractions that it’s hard to see how its reputation as a news organization recovers.

 

It wasn’t that long ago when journalists were trusted and admired, notes Michael Goodwin, chief political columnist for The New York Post

“Today, all that has changed,” he said at a Hillsdale College National Leadership Seminar, held in Atlanta last April.  “For that, we can blame the 2016 election or, more accurately, how some news organizations chose to cover it.

“Among the many firsts, [the 2016] election gave us the gob-smacking revelation that most of the mainstream media puts both thumbs on the scale – that most of what you read, watch, and listen to is distorted by intentional bias and hostility. I have never seen anything like it. Not even close.”

This was not naïve liberalism run amok, Goodwin concluded. “This was a whole new approach to politics. No one in modern times had seen anything like it.”

Then again, when he taught at New York’s Columbia University Graduate School of Journalism, Goodwin, like so many instructors at the school, many of them from the New York Times, often found himself telling students that the job of the reporter was “to comfort the afflicted and afflict the comfortable.”

“I’m not sure where I first heard that line, but it still captures the way most journalists think about what they do…From there, it’s a short drive to the conclusion that every problem has a government solution.’

“The rest of that journalistic ethos – ‘afflict the comfortable’ – leads to the knee-jerk support of endless taxation. Somebody has to pay for that government intervention the media loves to demand.”

From there, it’s been a short drive for generations to go from neutral reporters to political advocates.

At a time when the legacy gatekeepers of information are fighting to set the country’s news agenda while the web and social media carve out their audiences, this is a critical factor that news editors need to ponder in the “growing polarization” that is “jeopardizing even the foundational assumption of common truths, the stuff that binds a society together,” as Sulzberger wrote on New Year’s Day.

We are a far cry from the mission of the NYT espoused by Sulzberger’s great-great-grandfather Adolph Ochs in 1896:

“To give the news impartially, without fear or favor, regardless of party, sect, or interests involved.”

Setting the Lens on a $1-Trillion Infrastructure Plan

Setting the Lens on a $1-Trillion Infrastructure Plan

More details on the Trump Administration’s infrastructure plan came out just before Christmas. It’s setting up hopes that Congress will pass a bi-partisan infrastructure package in 2018.

If one looks at the issue through the lens of which Democratic members of Congress represent a district that favors President Donald Trump, it’s easy to see how bi-partisanship over some kind of infrastructure package might just burst forth in the coming year.

The 2018 mid-terms approach. Republicans passed a major tax-cut bill in the closing weeks of 2017 that will show up in workers’ paychecks by February. The Democrats, concluding that opposition to the tax package essentially means they now have to hope that people don’t see their wages grow, or see companies invest more in the United States, might want to show their home districts that they accomplished something for the nation.

“The White House is working to release a roughly 70-page infrastructure proposal sometime in January for members of Congress to use as a cornerstone for drafting the legislation in 2018,” the Washington Examiner reports of the infrastructure proposal.

In December, President Trump met with senior administration officials and House Transportation and Infrastructure Committee Chairman Bill Shuster, R-Pa., to discuss the proposal.

“The meeting with the president was encouraging and very productive,” Shuster said in a statement. “He’s a builder — he gets the importance of infrastructure and why it matters for jobs and the economy. Addressing our nation’s infrastructure in a bipartisan manner is going to take strong presidential leadership, and I believe we have a president who can provide the necessary leadership and who wants to rebuild our infrastructure to strengthen our economy.”

Infrastructure is a catch-all word that covers a $6-trillion construction market in the United States. And much of it in the U.S. needs an upgrade.

“The United States no longer has the best infrastructure in the world,” a White House document on infrastructure planning says. “For example, according to the World Economic Forum, the United States’ overall infrastructure places 12th, with countries like Japan, Germany, the Netherlands, and France ranking above us. This underperformance is evident in many areas, from our congested highways, which costs the country $160 billion annually in lost productivity, to our deteriorating water systems, which experience 240,000 water main breaks annually.”

The key will be alternative funding approaches, as the White House document telegraphs.

“Approximately one – fifth of infrastructure spending is Federal while the other four – fifths are roughly equally divided between State and local governments on one hand and the private sector on the other.

“Given these challenges, the Administration’s goal is to seek long-term reforms on how infrastructure projects are regulated, funded, delivered, and maintained. Providing more Federal funding, on its own, is not the solution to our infrastructure challenges. Rather, we will work to fix underlying incentives, procedures, and policies to spur better infrastructure decisions and outcomes, across a range of sectors.”

Legislative Director Marc Short, speaking on Fox News Sunday, said he is very confident about the prospects for bi-partisan agreement. “We’ve had conversations with Democrats. I think there’s a willingness on the policy to get there. The question remains will politics prevent it.”

The Wall Street Journal (behind the WSJ paywall) and other outlets are reporting that the president has invited Senate Majority Leader Mitch McConnell (R., Ky.) and House Speaker Paul Ryan (R., Wis.) to Camp David, a presidential retreat in Maryland, the first weekend in January “to make sure we’re all on the same page about where our priorities are for 2018.”

Speaking on the same show as Short, Sen. Ben Cardin (D., Md.) indicated his party was willing to negotiate on infrastructure, though he said the prospect was complicated by $1.5 trillion in tax cuts, which will add to deficit pressures.”

“Absolutely we want to get an infrastructure bill done,” Mr. Cardin said. “It’s more challenging because of the tax bill and the revenues that have been taken off the table, but we can work together and get something done on that.”

The Senate will have an even-slimmer 51-49 majority after Senator-elect Doug Jones (D-Ala.) takes office. Sen. McConnell will have to get some Democrats on board to pass something on infrastructure.

Bi-Partisan comments are popping up everywhere. Democratic Rep. Debbie Dingell (Mich.) on Tuesday said she is willing to work with President Trump to tackle the nation’s infrastructure problems if he is willing to reach across the aisle and work with the Democrats, TheHill.com reports.

“I will work with Donald Trump on anything that helps the working men and women of my district. So yes, I will work with him on infrastructure if he’ll work with us,” Dingell said on CNN’s “New Day,”

“We’ve needed to do something about infrastructure for decades. We’ve got an aging infrastructure with potholes and highways that aren’t working and bridges that are in trouble. We need to do something together to fix our infrastructure if we’re going to stay competitive as a nation,” she added.

She’s from a state that Trump won.

Here’s another moderate Democrat, Rep. Josh Gottheimer (D-N.J.), telling TheHill.com he’s willing to work across the aisle.

I’ve been over to the White House talking to [President Trump] about infrastructure,” said in an interview with The Hill. 

“As co-chair of the Problem Solvers Caucus we’re taking on infrastructure. It’s very important. Of course, like anything, the details are what matters,” he said. 

Gottheimer, one of 12 House Democrats elected in a district that Trump won in 2016, noted that health care and a deal affecting immigrants under the Deferred Action for Childhood Arrivals program may be other areas where bipartisanship may prevail in 2018.

The $200-billion initial investment that the administration is calling for could prime the pump on some “marquee” projects. We might even see pilot projects that highlight a streamlined approval process, or a unique approach to public-private partnerships (p3s).

A blog post on the “Knowledge at Wharton,” the business school of University of Pennsylvania, notes a few examples of using P3s for upgrading municipal water systems.

“Already struggling before Hurricane Sandy hit, the city of Bayonne [New Jersey] entered a joint venture partnership with Kohlberg Kravis Roberts and United Water soon after the storm. While the city maintains ownership and the control of user rates, the agreement eliminates existing municipal debt and improves both the water authority’s finances and Bayonne’s credit rating.

If and when an infrastructure bill gets across the finish line when Congress reconvenes, they will be looking at a fairly solid outlook for new construction starts, according to industry data provider Dodge Data and Analytics (which this observer once worked alongside on the editorial side of McGraw Hill Construction).

In its annual forecast for 2018, DD&A is calling for a 3% growth in new construction starts in 2018 to $765 billion. So this suggests that the recovery from the Great Recession of 2008, which effectively began in 2012 after a couple of flat years from 2010 on, still has legs.

“Institutional building will advance 3%, maintaining its upward track after this year’s 14% jump,” says Robert Murray, chief economist for Dodge Data.

“Public works construction will improve 3%, slightly more than the 1% growth in 2017. Highways and bridges should be helped as federal funding rises to the levels called for by the FAST Act, while the environmental categories will partly reflect reconstruction efforts related to Hurricanes Harvey and Irma. Additional benefit may come from the infrastructure program proposed by the Trump Administration, should it achieve passage in some form.”

But breaking out the numbers should give some private equity infrastructure funds that are primed for energy plant construction a bit of a pause. Murray expects new construction starts for electric utilities and gas plants to drop 13%, “falling for the third year in a row after the exceptional amount reported in 2015. Power plant construction starts will ease back as new generating capacity comes on line.”

Plenty of public works around the nation need the help. New Jersey residents might recognize the Pulaski Skyway in Jersey City from the lead image on this post, which has been undergoing a major upgrade since 2014 because chunks of the 1930’s-era Skyway were literally falling from the undergirding.

It was no longer safe to travel over. It was supposed to take a year to fix. The more contractors fix it, the more problems they find. The Skyway is now expected to reopen in Spring of 2018, as NJ.com reported last summer:

“This makes the third time reopening the Skyway has been pushed back. In April 2015, officials blamed the harsh winter and the discovery of rusted floor beams which pushed the completion to late 2016. Last June, officials said the Skyway wouldn’t reopen to traffic until sometime in Summer 2017. A specific date was to be decided this spring.”

Like many major bridges from the 1930’s, the Pulaski Skyway, a steel deck truss cantilevered bridge, is considered functionally obsolete because it doesn’t meet current highway bridge standards. This has complicated the rehabilitation work on the bridge, which is one of eight New Jersey bridges with a similar design.

A Merry Christmas Season

A Merry Christmas Season

Merry Christmas, Happy Holidays and a very Happy New Year! For friends and family near and far. For veterans serving and away from family, for all workers on the job today, thank you and season’s greetings.

From the year-in-review department, which is busy compiling its best-of lists for a post before the year concludes, I’ve got to pluck out a belated shout-out to the Wreaths Across America foundation and its work honoring veterans during the Christmas season.

As a former Mainer, I’ve watched the growth of the #WreathsAcrossAmerica phenomenon with a mixture of pride and awe. The tradition began when Maine wreath maker Morrill Worcester donated 5,000 wreaths to Arlington Cemetery and this year, a total of 1.2 million wreaths will be placed on markers across the country in 1,238 locations, according to the A.P.

“Each December on National Wreaths Across America Day, our mission to Remember, Honor and Teach is carried out by coordinating wreath-laying ceremonies at Arlington National Cemetery, as well as over 1,200 additional locations in all 50 U.S. states, at sea, and abroad,” the website says.

The event has become a local story that generated headlines across many local publications and broadcast outlets. For example, WKYT in Kentucky reported on its local ceremony where volunteers laid more than 900 wreaths on the headstones of “fallen heroes in the largest Wreaths Across America ceremony in Camp Nelson’s history.”

It also got notices for who didn’t cover the wreath-laying ceremony at Arlington National Cemetery on Dec. 16th. Janine Suppa of Arlington wrote this to the Washington Post letters section last week:

“As the daughter, granddaughter and niece of men who bravely served this great country, I participated in the fine tradition of Wreaths Across America on Dec. 16 at Arlington National Cemetery. Thousands of proud Americans, including children and the elderly, placed beautiful Christmas wreaths at gravesites and said aloud the names of those who gave of themselves for our freedom.

“It was a perfect day filled with patriotism and respect. Imagine my surprise on reading The Post and finding no mention of this tradition at Arlington but only a photograph of wreaths being placed in Erie, Pa. [Digest, Dec. 17]. Our brave men and women of the armed forces deserved more.”

The Wreaths Across America caravan traveled earlier this month from Columbia Falls, Maine, where the wreaths were made. The caravan went through several states before arriving in Arlington.

Vietnam War Medal of Honor recipient Roger Donlon and his wife, Norma Donlon were the grand marshals this year.

As Mainers say, it’s wicked cool.

With Tax Cut Bill Signed, a Shift to Infrastructure

With Tax Cut Bill Signed, a Shift to Infrastructure

It’s official: President Donald J. Trump put his signature on the landmark Tax Cuts and Jobs bill Friday that represents $1.5 trillion in tax cuts for some 80 percent of taxpayers in the most sweeping overhaul of the tax code since 1986.

He called the legislation a win for the middle class and a bill for jobs in remarks today:

Now, the construction industry and the administration are gearing up for an infrastructure package, which the president referenced in his remarks about the bill-signing today.

 

A few recaps: First, the bill is a big win for Republicans who passed the measures in both the House and Senate Wednesday without any Democratic support and sent it to the president’s desk soon after House and Senate conference committees ironed out the bill’s differences.

Among the many features of the bill that will help small and large construction firms: the retention of Private Activity Bonds for underwriting some construction projects.

“The fact that private activity bonds retained their tax-exempt status in the final tax reform legislation is viewed as a plus for institutional building and public works,” says Dodge Data & Analytics chief economist Robert Murray. He is still expecting modest growth in total construction activity in 2018 and that the tax bill will play a role in shaping the pattern of activity.

Assuming that economic growth is boosted by the corporate tax cuts, he adds, the “likely beneficiaries would be commercial building and multifamily housing, although there’s also concern that more limited deductions for state and local taxes could dampen some of the growth expected for single family housing.”

On the business side, it lowers the corporate tax rate from 35% to 21% and lowers the tax on repatriated profits to 8% (15.5% for cash). The legislation will pay off in a big way after the tax-avoiding technique of parking profits offshore became widespread, notes The New York Times. The tax bills “would allow companies to bring nearly $3 trillion in profits home, at greatly reduced tax rates.”

A critical change that impacts construction industry contractors involves the pass-thru rate on businesses that incorporate as S-corporations, partnerships, LLCs, and sole proprietorships, which is how many firms in construction are organized.

For their first $315,000 of joint income, according to the House and Senate Conference Committee’s legislation backgrounder, the bill generally provides a deduction for up to 20% on business profits – reducing their effective marginal tax rate to no more than 29.6%.

Another big deal for many mid-sized contracting and construction firms was the repeal of the Obamacare individual mandate in the bill.

Constructions and firms are seen benefiting from these key features in the bill:

  • Immediate expensing of capital investments, which allows businesses to immediately write off the full cost of new equipment.
  • Allows small businesses to write off interest on loans. This will help small firms looking to expand or hire workers for a construction industry facing a labor shortage from project managers to key building trades skills such as welders.
  • It also repeals the individual mandate under Obamacare, which mandated individuals buy insurance or face a fine.

Another key feature that will definitely make a difference to building trades workers are the standard deductions.

The bill “increases the standard deduction to protect roughly double the amount of what you earn each year from taxes – from $6,500 and $13,000 under current law to $12,000 and $24,000 for individuals and married couples, respectively.”

President Trump had promised to unveil his proposal for a massive infrastructure package as soon as Congress passes an overhaul of the tax code.

Trump administration officials have been meeting with infrastructure and transportation groups over the last two weeks about the infrastructure plan the president is supposed to unveil in January, possibly around the time of his State of the Union address on Tuesday, Jan. 30, says TheBondBuyer.com.

“They’re serious this time, I think,” said Jeff Davis, senior fellow and editor of a weekly news report at the Eno Center for Transportation.

As Congress made quick progress on taxes, administration officials recently began trading ideas with lawmakers about the infrastructure effort, Rep. Sam Graves (R-Mo.) told TheHill.com’s

“White House tech policy adviser Reed Cordish said at an Internet Association conference that the administration currently has a detailed, 70-page memo of infrastructure principles,” TheHill.com reported.  Cordish said the White House document, which is still being finalized, will be submitted to Congress and serve as a building block for lawmakers to draft an actual legislative package.

Amtrak 501 Derailment and Positive Train Control

Amtrak 501 Derailment and Positive Train Control

[Updated 12/19/17] Excessive speed details are emerging after the Amtrak 501 train derailment near Olympia, Washington Monday. And it’s sparked a flurry of articles about whether Positive Train Control technology could have prevented the wreck.

The derailment at an overpass trestle caused fatalities, though the number is unclear. Multiple injuries are reported from the accident.

Amtrak said the train was carrying some 80 passengers and seven crew members. It was traveling at about 80 miles per hour in a 30-mile zone before it went off a trestle overpass and two of the cars hit Intestate 5, National Transportation Safety Board investigators said Monday night.

As the NTSB sets up for its investigation, one of the big questions likely to come up is whether Positive Train Control technology could have slowed the train as it approached the sharp angle it had to negotiate as it traversed the trestle. In short, PTC deploys GPS networks and communication between the train to calculate whether an emergency stop or slowdown should kick in.

The train was on its first run between Seattle and Portland after a multi-million upgrade that included a faster transit time on the line. Instead, disaster struck.

“The new route improvement also included new locomotives and a positive train control system, which aims to help prevent crashes,” according to a Washington DOT press release. But the release suggests the PTC system was likely not online.

“This ‘next generation’ rail equipment features safety upgrades, including on-board positive train control system, which will automatically stop the train when there are dangerous situations on the rails, once the system is activated corridor-wide in 2018.”

The Philadelphia Amtrak derailment in 2015 is one such example of a train going too fast through a curved section of track without PTC systems in place.

The basic details, which the New York Times reported:

“Brandon Bostian was driving a Washington-to-New York train on May 12, 2015, when he accelerated to a speed of 106 miles per hour as the train entered a curved section of track whose designated speed was less than half that. The train careered off the track in the Port Richmond neighborhood of Philadelphia.

In addition to the [eight] deaths, more than 200 people were injured.”

Had PTC been operational on the train, it would have automatically slowed or even stopped the train before it hit that curve at that speed, the NTSB’s report on the accident found.

Amtrak has said in a release that it expects to bring Positive Train Control technology online on its entire Northeast Corridor line by the end of 2018.

I’m checking into the status of the release that says Amtrak activated PTC on its New York-to-Washington, D.C., route, “completing installation on most Amtrak-owned infrastructure on the Northeast Corridor.” Installation and activation are two very  different things.

The Rail Safety Improvement Act of 2008 called for the PTC installment on most of the nation’s rails. But in late 2015, according to the Dept. of Transportation’s Federal Railroad Administration (FRA), “Congress extended the deadline by at least three years to December 31, 2018, with the possibility for two additional years if certain requirements are met.”

So, in short, railroads have until 2020, full stop, to get the PTC technology installed if they fall short of the 2018 deadline.

The reality is that the PTC often has to grapple with centuries-old rail systems. Even with upgrades such as new tracks and cars, the systems that integrate the trains often run on top of legacy technology.

Meanwhile, on a day that the WSDOT invited reporters to cover the inaugural trip of the Amtrak 501 as a public relations event, they ended up reporting on a terrible accident.

Heavy.com reports:

“Alex Rozier, a reporter with KING-TV in Seattle was on the first train to leave on the new route, but got off before the crash, he said on Twitter. The DOT was handing out landyards to passengers to commemorate the launch.”

[Officials have updated the death toll noted in this Twitter video to three deaths.]

 

Disney, Fox and Net Neutrality: Streaming Bits and Content Delivery

Disney, Fox and Net Neutrality: Streaming Bits and Content Delivery

[Updated 12/16/17] Two very big developments hit the news Thursday that tell us as much about the state of media, entertainment, news and culture as they do the future of media and society.

For one, Walt Disney’s $52.4-billion stock deal to buy a major portion of 21st Century Fox is all about the future of content delivery via video streaming.

And second, the Federal Communications Commission’s 3-2 vote (along party lines) to roll back Depression-era regulations that treat internet providers as a monopoly is about unleashing innovation. In so doing, the FCC order may free up the U.S. to catch up with the world in advancing content delivery networks.

“Walt Disney said Thursday it agreed to buy most of 21st Century Fox Inc. for $52.4 billion in stock, in a deal that would give Disney a dominant position in movies and sports and help bolster its flagging television business as it prepares to directly challenge digital giants like Netflix Inc,” the WSJ reported.

The New York Times called the Disney-Fox deal a move that will reverberate from Hollywood and Silicon Valley to TVs and smartphones around the world:

“Disney has already announced an ambitious plan to introduce two streaming services by 2019. With this deal and the wealth of movies, TV shows and sports programming it provides, the company will now have the muscle to become a true competitor to Netflix, Apple, Amazon, Google and Facebook in the fast-growing realm of online video.

“‘The pace of disruption has only hastened,” Robert A. Iger, Disney’s chief executive and chairman, said in an interview. “This will allow us to greatly accelerate our direct-to-consumer strategy, which is our highest priority.'”

The FCC’s order gets at this trend, saying it reverses the commission’s “abrupt shift two years ago to heavy-handed utility-style regulation of broadband Internet access service and returns to the light-touch framework under which a free and open Internet underwent rapid and unprecedented growth for almost two decades.

“We eliminate burdensome regulation that stifles innovation and deters investment, and empower Americans to choose the broadband Internet access service that best fits their needs.” (Link to full order.)

The Wall Street Journal’s Review and Outlook column picks up on a few more business trends at play with the Disney-Fox deal, and the FCC rule restoring the internet to pre-2015 rules:

“Consumers will also benefit from the slow breakdown of the cable monopoly as they customize “bundles” like Hulu or a Disney stream that may cost less. Americans will also enjoy new distribution options, which could have been barred by the net-neutrality rules.

“This week T-Mobile announced its acquisition of Layer3 TV, a Denver startup that streams high-definition channels online and will compete with AT&T’s DirecTV Now. Verizon Wireless last month said it will start delivering high-speed broadband to homes over its wireless network late next year. Google and AT&T are experimenting with similar services that will be cheaper than digging dirt to lay cable. This could be a boon for rural America.”

Breitbart.com’s Allum Bokhari documents some of the hysteria among netizens who see nefarious motives behind the FCC’s order:

“Opponents of the repeal say that it gives ISPs more power to favor their own content, especially streaming services. Comcast, they argue, might choose to make Netflix and YouTube load slower and their own streaming services load faster. Under new FCC rules, however, any such ‘throttling’ of content must be publicly disclosed by ISPs. Furthermore, if ISPs promise not to throttle, as Comcast has done, and then break their promise, the FTC can impose penalties upon them.”

That’s not enough for socialist Senator Bernie Sanders of Vermont.This is an egregious attack on our democracy. The end of #NetNeutrality protections means that the internet will be for sale to the highest bidder. When our democratic institutions are already in peril, we must do everything we can to stop this decision from taking effect,” went one of his tweets Thursday.

Breitbart’s Bokhari notes: “Yeah, it sure would suck if the internet were dominated by one big corporation with documented ties to an established political dynasty and the power to swing elections with a few algorithm changes. Oh wait.”  The article is a wickedly funny round up of some over-the-top reactions to the FCC’s order.

It’s funny, but serious stuff, too.

Bokhari’s reporting is a chronicle of Twitter, Facebook and Google’s ability to bend content to fit their founders’  left-leaning views, and suppress conservative thought in the process. Anyone who cares about free speech, no matter their political stripe, should be worried about this.

“By the way, Google has vigorously promoted net neutrality in theory but less in practice, adds the WSJ’s Review and Outlook column. “While Google says it remains “committed to the net neutrality policies,” the search engine uses opaque algorithms to prioritize and discriminate against content, sometimes in ways that undercut competitors. Net neutrality for thee, but not me. Google ought to be transparent about its practices.”

It’s not just these dominant software makers of web content platforms who deploy algorithms that reflect their bias.

Here’s one little example with my Firefox browser feature, which reminds me of the sites I visit the most each time I launch a new browser session. No matter how many times during the week that I read Breitbart.com, Firefox’s “Top Sites” feature doesn’t remember Breitbart.com as one of my “Top Sites.”

Firefox is the brainchild of the Mozilla Foundation, the outfit that ousted its CEO over his contribution to California’s Proposition 8 vote on traditionalist views of marriage.

(For what it’s worth, Safari keeps very accurate track of which sites I visit the most and doesn’t try to de-select or select sites for me in that feature.)

But not Firefox. As far as that browser is concerned, I never visit Breitbart.com. It’s annoying, and troubling that my browser software refuses to “heuristically” remember that I have visited a very popular, and highly trafficked news site with a conservative point of view. Now, I can change my features to ensure my most-visited sites are prominent in my browser settings. But Firefox’s default settings go to the issue of  “content neutrality” and baked-in bias with the software that powers our information-consumption on the web.

For those who argue we should have Net Neutrality regulations because of what “could” happen or what the ISPs “might” do – think for a minute about a government’s regulation of the internet in the extreme, as in the infamous “Great Wall of China.” It’s not good.

“China is able to control such a vast ocean of content through the largest system of censorship in the world, aptly known as the Great Firewall of China,” Bloomberg reported. “It’s a joint effort between government monitors and the technology and telecommunications companies that are compelled to enforce the state’s rules. The stakes go beyond China, which is setting an example that other authoritarian countries can imitate.

“While strict censorship is nothing new in one-party China, under President Xi Jinping online restraints have grown tighter, particularly around the time of politically sensitive events like the death of Nobel Peace Prize winner Liu Xiaobo in July. Ahead of the Communist Party Congress in October, China began blocking the WhatsApp messaging service and extended a clampdown on virtual private networks, a commonly used method to circumvent the Great Firewall.”

If only the people who showed up to protest the FCC’s vote would ponder what can happen when governments slap heavy-handed regulations on what companies can and can’t do on the internet.

A light touch is what the FCC’s rollback order is all about, returning us to an approach that should have bi-partisan support. It’s about government getting out of the way of broadband innovation. Right now, the U.S. is middling in the quality of its download speeds. South Korea and many Asian countries are way ahead in network buildouts.

The “US ranks 9th in the world in fixed broadband speed at 70.75 Mbps average download and 27.64 Mbps average upload. Ranking in the top ten is good but the US’s average download speed is less than half top-ranked Singapore’s 154.38 Mbps,” according to Forbes.

“The picture for the US is not nearly as good when you look at mobile internet speed where the US ranks 46th, just ahead of Albania and behind Oman. Average download speed in the US is 23.05 Mbps which is less than half the average download speeds in Norway, the Netherlands and Hungary. Average upload speed in the US is 8.26 Mbps.  While mobile download speed increased by almost 20% from July 2016 to July 2017, the US’s world ranking fell from 44th to 46th. Not good.”

The ISPs have no interest in blocking bits. Comcast tried throttling Bit Torrent back in 2007 and was hounded by the Internet. Congress investigated and ruled the move illegal. Throttling is hard to hide these days. But baked-in, algorithmic bias in the software that runs on top of the web? That’s another story.

ISPs have a vested interest in opening up their pipes – and finding ways to improve an even faster, true high-definition video experience on real broadband.

Disney gets that. So does Fox. And so does the FCC.

MIT Media Lab founder Nicholas Negroponte gets it too. His thoughts on “our transition from atoms to bits” is worth adding to the discussion.

[Updates prior version to add Negroponte’s and WSJ information.)

 

 

 

Would-Be Terror Attacker Charged With Terrorism

Would-Be Terror Attacker Charged With Terrorism

The latest on the would-be suicide bomber who reportedly botched his attempted terror attack:

Per the NYPD:

UPDATE: Akayed Ullah, the suspect arrested in yesterday’s terror attack in NYC, has been charged with the following:

• Criminal Possession of a Weapon

• Support Act of Terrorism

• Making Terroristic Threat

From ABCSeven.com:

The charging document said law enforcement personnel found a 9-volt battery inside Ullah’s pants pocket, wires connected to the battery running under his jacket and fragments of metal pipe. There was also a remnant of what appeared to be a Christmas tree light bulb attached to the wires.

According to the document, Ullah made statements indicating he “was inspired by ISIS to carry out” the attack. He said: “I did it for the Islamic State.”

The suspect … is from Bangladesh and has been in the country for six years. Authorities say he entered the US on an F4 visa, a family-based visa, and lived at an address in Brooklyn. The FBI searched several locations in the borough.

The pipe bomb was assembled in the suspect’s apartment, officials said, in an attack he is believed to have been planning for a year.

 

From Monday:

The New York Port Authority has re-opened after a would-be suicide bomber’s attempted terror attack Monday morning during the city’s rush hour at the bus terminal transit hub, arguably the busiest in the country.

He is reportedly seriously wounded; police say three others are injured, though so far, none seriously.

The New York Post reports that the suspect is in custody:

The man — a 27-year-old Brooklyn man identified by high ranking police sources as Akayed Ullah — had wires attached to him and a 5-inch metal pipe bomb and battery pack strapped to his midsection as he walked through the Manhattan transit hub.

The man partially detonated the device, which he was carrying under the right side of his jacket, prematurely inside the passageway to the A, C and E trains at Eighth Avenue and West 42nd Street around 7:40 a.m., sources said.

 

@NYCityAlerts, a twitter feed by a “team of reporters tweeting NYC news,” got access to the security cameras under review after the incident:

 

CBSNews:

Gov. Andrew Cuomo said the suspect used a low-tech device and that the injuries of near-by transit riders were minor (three reported so far). We hope they go well, he added of the injured.

New Yorkers once again showed the nation and the world that they live in one tough city: Within two hours hour of the bombing attempt, the Port Authority bus and transit station had re-opened. Residents and visitors to the holiday bustle eventually went about their business.

This is what Gov. Cuomo got at in his remarks earlier Monday: “Let’s go back to work.” The terrorist attempts, he added, want to stymie the normal pace of life, to cause society to freeze up in terror. “That’s exactly what they want and that’s exactly what they’re not going to get.”

“Thank God the perpetrator did not achieve his ultimate goals,” said New York Mayor Bill DeBlasio Monday in a press conference. “Thank God for the first responders who were there so quickly to make sure people were safe.”

Everything about this case is ongoing. This post will be updated throughout the day.

Ahead of Tax Reform Bill, a Revving Economy

Ahead of Tax Reform Bill, a Revving Economy

All eyes on are on Congress this week as House and Senate conference committees hammer out differences in their Tax Reform/Tax Cut bills and aim to pass historic legislation by the end of the year.

President Donald Trump is reportedly planning a speech on Wednesday about the tax cut legislation, Bloomberg reports. This is a president making the case to the American people about the need to modernize the tax code and level the playing field for American workers and businesses.

Setting the table for all this is Friday’s November jobs report from the Bureau of Labor Statistics  and what it says about possibilities for even greater GDP growth after the third quarter clocked in at 3.3%, up from the second quarter’s 3.1%.

The BLS says the economy added 228,000 new jobs in November over the prior month; unemployment is at at 17-year low 4.1 percent. That works out to about 6.6 million unemployed people. For the year, BLS data show the unemployment rate and the number of unemployed persons were down by 0.5 percentage point and 799,000, respectively.

But the real number everyone is looking for is wage growth, one of the key goals of the tax cut package in Congress.

The WSJ has a handy page of analysis that quotes economists those of the dismal science and finds plenty of optimism about what they see over horizon, even though “wage growth hasn’t increased particularly quickly.”

A sampling:

“The annual growth rate of average hourly earnings was a very pedestrian 2.5% in November. We expect an acceleration above 3% next year.” — Paul Ashworth, chief U.S. economist at Capital Economics

“If unemployment continues to fall, wage growth will rise.” — Ian Shepherdson, chief economist at Pantheon Macroeconomics

“We expect hourly earnings to accelerate some more over time.” — Jim O’Sullivan, chief U.S. economist at High Frequency Economics

“The NFIB survey sub-component that queries small business owners about their plans in terms of compensation changes provides a decent leading indicator of the ECI private wage and salary measure (see chart below). The signal being flashed is for accelerating gains in wages & salaries in the months ahead.” — Joshua Shapiro, chief U.S. economist at MFR Inc. 

“The annual growth rate of average hourly earnings was a very pedestrian 2.5% in November. We expect an acceleration above 3% next year.” — Paul Ashworth, chief U.S. economist at Capital Economics

“If unemployment continues to fall, wage growth will rise.” — Ian Shepherdson, chief economist at Pantheon Macroeconomics.

“Poststorm repair work likely supported the 24,000 increase in construction jobs. That said…the underlying trend is strong. This will push the unemployment rate below 4% very soon.” —Ian Shepherdson, Pantheon Macroeconomics”

The BLS breakout data tell many stories but this one popped:

“Within construction, employment among specialty trade contractors increased by 23,000 in November and by 132,000 over the year.”

This is notable because it would show that building trades groups are responding to the labor shortage in construction by recruiting and training more new entrants into the building trades to meet that growth.

Apprenticeships are expanding their scope of training to meet the contractors’ demand for specialty skills in construction.

Wage rates are inching up overall in construction as demand soars. The Central Valley Business Journal, based in California, plucks out of the BLS data:

The U.S. Department of Labor reports that the need for masonry workers is predicted to rise by 15 percent from 2014-2024, for instance. Comparatively, demand for electricians, plumbers, and roofers, is expected to grow between 12-14 percent in each sector within the same time span.

The BLS notes that employment within the construction industry overall is likely to grow by 10 percent from 6.5 million to 7.2 million jobs, which is higher than the national average for all occupations.

This is another area to watch for wage growth in working class and middle-class sectors.

Trump Declares So.Cal Emergency; Wildfires Seen From Space

Trump Declares So.Cal Emergency; Wildfires Seen From Space

Forecasters say the Santa Ana wind event whipping up the destructive blazes that leveled homes, highways and major swaths of Southern California infrastructure is the strongest of its kind this year. President Donald Trump declared a state of emergency in the region as a result of the fires.

The declaration will free up federal assistance to “supplement State, tribal, and local response efforts due to the emergency conditions resulting from wildfires beginning on December 4, 2017, and continuing.”

An estimated 141,000 to 150,000 acres stretching from Santa Barbara to San Diego have been scorched since the fires kicked up Monday, according to fire safety officials; some 200,000 residents have fled their homes and businesses.

President Trump’s declaration authorizes the Department of Homeland Security, and FEMA (Federal Emergency Management Agency) to “coordinate all disaster relief efforts and help ease the hardship on the local populations.”

The Sacramento Bee sums up which and where the six major wildfires are burning in the Southern California region:

“The Creek, Liberty, Lilac, Rye, Skirball and Thomas fires in Ventura, San Diego, Riverside and Los Angeles counties, which started between Monday and Thursday, have prompted the evacuation of close to 200,000 residents, according to the California Department of Forestry and Fire Protection.”

Satellite images such as the lead image are tracking the plumes of smoke from space.

The hot, dry, notorious winds had died down Wednesday, giving firefighters a little headroom to battle back the existing fires, but forecasters expected more winds Thursday evening and Friday.

“Retirement communities built on golf courses, thoroughbreds in race horse stables and other usually serene sites” have been swept up in the blazes in the San Diego area,” the Associated Press reported Friday.

Fox News Channel reported that more than 85 structures in San Diego had been leveled.

NASA’s Earth Observatory has posted some amazing images, and picked up a quote from one of its own in the L.A. Times coverage:

A prolonged spell of dry weather also primed the area for major fires. This week’s winds follow nine of the driest consecutive months in Southern California history, NASA Jet Propulsion Laboratory climatologist Bill Patzert told the Los Angeles Times. “Pile that onto the long drought of the past decade and a half, [and] we are in apocalyptic conditions,” he said.

In this image seen at left, taken with NASA’s Terra satellite, the Earth Observatory website notes the plumes are coming from the Thomas Fire in Ventura County, which had charred more than 65,000 acres as of Friday.

“Smaller smoke plumes from the Creek and Rye fires are also visible.

“The fires mainly affected a forested, hilly area north of Ventura, but flames have encroached into the northern edge of the city. On December 6, 2017, Cal Fire estimated that at least 12,000 structures were threatened by fire.

“Forecasters with the Los Angeles office of the National Weather Service issued red flag warnings for Los Angles and Ventura counties through December 8, noting that isolated wind gusts of 80 miles (130 kilometers) per hour are possible.”

Investing sites have been keeping an eye on utilities that serve the region. Seeking Alpha reports:

“Southern California Edison International (EIX) has taken a real beating, being the second large electric power provider which has seen a substantial drop in its share price following the wildfires in California. This follows the serious correction which PG&E (PCG) has seen in October following wildfires at the time. The market seems to believe that the impact of the fire is very bad, as shares of the company plunged 13%, losing a full $10 in value in response to the news about the fires. This corresponds to a $3.3 billion reduction in the value of the company.”

Southern California Edison reports that it serves 15 million residents through 5 million accounts in a 50,000 square mile area in Southern California.

We’ve read through a ton of coverage today on the ongoing fires. The New York Times does a great job on in-depth maps (their graphic department is legendary).

But for comprehensive coverage of the areas affected and how to get more information, the ongoing SacBee coverage deserves kudos.

Santa Ana Winds Whip up Wildfires: L.A. Calls for Evacuations

Santa Ana Winds Whip up Wildfires: L.A. Calls for Evacuations

Wildfires raging in southern California have destroyed hundreds of homes; others in the Bel-Air area are reportedly ablaze.  The morning commute looked like a scene from a disaster movie.

L.A. Times: “The fire also caused massive gridlock along one of the city’s most congested commuter corridors. Caltrans announced the full closure of the 405 Freeway between the 101 and 10 Freeways. It has also closed all onramps onto the 405.”

The Los Angeles Police Department has ordered the evacuation of homes along Casiano Road, Moraga Drive and Linda Flora Drive. Residents of Mandeville Canyon and Sullivan Canyon should be prepared for evacuation the department said.

Firefighters say they expect the fires to come under control by Friday. Hot, dry Santa Ana winds whipped up the blazes, which Reuters reports is named the Thomas Fire. “It broke out on Monday evening in the foothills above Ventura. Winds quickly drove it west into the city some 50 miles northwest of Los Angeles.”

Fox News reports 150,000 Los Angeles-area residents have been forced from their homes. Some 11,000 acres are scorched. What a way to close out the year for area residents. So far, no loss of life reported. A rebuilding year for hundreds of thousands of California residents in southern and Northern California after major wildfires wiped out homes and infrastructure.

$14 billion LA Natural Gas Plant Shelved. Gulf Region Shrugs.

$14 billion LA Natural Gas Plant Shelved. Gulf Region Shrugs.

[Updated]: The current glut in natural gas and lowered prices for the commodity is driving a South African energy firm to shutter plans for a Liquified Natural Gas plant in Louisiana worth up to $14 billion. Industry watchers and locals took the news in stride. The region is booming in LNG plants and the action is in delivering it to overseas markets.

European markets are a key target, which helps introduce some competition to Russian producer Gazprom. More on that a little later.

The Associated Press says Sasol has dropped plans for an $11 billion to $14 billion U.S. plant in Mossville, just outside of Lake Charles, to convert natural gas to liquid fuels and to pull out of Canadian shale.

“The company had announced in January that it was delaying final investment plans for the plant near Lake Charles because of a collapse in world oil prices,” the AP adds.

The Sasol project was part of a $100 billion investment plan in the region that includes an $11.1 billion ethane cracker plant that could create 5,000 construction jobs and some 500 permanent jobs when the facility goes online, local officials tell reporters.

The United States is awash in natural gas from the shale-drilling boom that is remaking the country as a global energy provider. LNG plants are a big piece of that mix.

One of the biggest trends in the energy industry in the past few years has been the construction of LNG export-readying facilities in the U.S. after Congress dropped its 40-year export ban on oil (and natural gas) in 2015.

The Federal Energy Regulatory Commission (FERC) has worked up a chart showing the latest permits for LNG production.

Despite Sasol’s decision to shelve its LNG plant, the U.S. Gulf Coast is “expected to be a crude oil, natural gas and LNG export hub for years to come, even as supply, demand and geopolitical swings shift market dynamics,” says energy data and news provider Platts.

Quoting parent company’s S&P’s recent research outlook on the gas industry, Platt’s notes:

“At the heart of the forecast is the fact that US supplies are abundant and cheap, and billions of dollars of new infrastructure is being added to link those resources to overseas destinations, particularly in Asia, Europe, the Middle East.”

Platts continues:

There is ample natural gas supply in the US, particularly from the Northeast, where the prolific and low-cost Marcellus and Utica shale plays will continue to supply much of the growth in natural gas demand, the report said. Coal-to-gas switching, increased LNG use, and exports to Mexico are helping to drive that.

“Northeast regional differentials continue to remain below the Henry Hub price but we believe they will narrow given the significant amount of takeout capacity being built in the region over the next several years,” S&P Global Ratings said. 

Companies with strong acreage positions in the Permian, which spans West Texas and southeastern New Mexico, should see the largest growth in 2018 due to its low breakeven drilling costs and double-digit returns, even with $50/b crude prices.

Emerging markets are hungry for LNG exports from the U.S., says Ning Lin, an analyst with consulting firm RBAC. He expects the next five to 10 years to see a major ramp-up in facilities that convert natural gas to its exportable state in LNG.

A recent deal in Poland is a case in point. Polish Oil and Gas Company Group (PGNiG) announced last week that it has signed a five-year contract for LNG supply sourced from the Sabine Pass LNG terminal in Louisiana.

The WSJ picks up on the export trend in an editorial that points out how LNG exports to Europe, particularly Poland, are countering Russia’s regional influence. The Kremlin-owned energy company Gazprom “currently provides more than two-thirds of Poland’s gas, and other European nations also rely heavily on Russian energy.”

But Russia’s era of go-freeze-yourself foreign policy may be drawing to a close. In 2015—the year Moscow cut off gas supplies to Ukraine—the U.S. surpassed Russia as the world’s top natural-gas producer. By February 2016 major shipments of American LNG were headed abroad for the first time. Two months after U.S. LNG from the lower 48 states hit the export market, Poland’s PGNiG announced that it didn’t intend to renew its long-term agreement with Gazprom, which will expire in 2022.

The size of the delivery is about 30 billion cubic feet, which the piece points out is modest by comparison.

But it’s “most likely the first in a series of contracts,” and Poland’s long-term goal is to “increase the energy security in this region, which has historically been dominated by Russian gas,” executives from PGNiG explained. By offering an alternative to Russian energy, the U.S. empowers its European allies and weakens the Kremlin’s coercive regional influence.

It’s one reason among many that the Gulf Region is not sweating the Sasol decision.

[Updated 11/28/17 to include details on the PGNiG LNG contract.]

Koch Brothers Part of Time’s Sale to Meredith

[Updates prior version]:  Meredith Corporation made its acquisition of Time, Inc., official Monday, in a deal valued at about $2.8 billion.

It includes $650 million in preferred equity commitment from Koch Equity Development (KED), the finance arm of Charles G. and David H. Koch.

The boards of directors of Meredith and Time Inc. have approved the $18.50 per- share in an all-cash transaction.

The deal caps the end of an era, as the WSJ’s nut graph sums up:

“Time, whose namesake Time magazine hit the newsstands in March 1923, emerged as one of the country’s great journalistic enterprises, shaping both the political and cultural landscapes. But in recent years, the magazine publisher lost ground as a shift among readers to digital platforms cut into traditional print revenue and a new generation of online rivals emerged, among them BuzzFeed, Vice Media and Refinery29.”

The digital side of the merger reflects the reality for media brands: roll up massive audiences to offer advertisers a breadth of reach and depth of granularity that digital promises:

“The Meredith and Time brands will have a readership of 135 million people and paid circulation of nearly 60 million,” Meredith says. “Monthly unique visits are expected to range in the 170 million range and more than 10 billion annual video views.”

The deal should help the merged companies target younger audiences who consume most of their content on mobile devices.

Meredith Corp. brands include titles that consumers of glossy, highbrow mags might never fess up to reading: Better Homes and Gardens, Family Circle, AllRecipes and Parents.

This observer has been a subscriber off and on to Better Homes and Gardens and Family Circle. (My mom gifted them to me after I moved out of the city and worried that I might not realize the stove is more than a place to store things.)

Articles for women — raising kids, dealing with family issues, fashion and home decorating abound. If you want to improve your game in the kitchen, they deliver.

These titles may owe more to their profitability than middle-America fare, however. Most of the Meredith titles are free of politics or delve into it with balance. They generally avoid political correctness that so many highbrow magazines feel is their duty to foist upon readers these days. If it’s not your brand of politics, then it kills the immersive experience that magazines are supposed to deliver in their editorial mission.

The New York Times questioned whether Time will now become an organ for the Koch Brothers’ conservative causes. The Koch organization puts that to rest, saying “KED will not have a seat on the Meredith Board and will have no influence on Meredith’s editorial or managerial operations.”

The employees of Time, rather than counting their luck that their jobs may not be cut, trundled into a company auditorium in a “funereal atmosphere” according to a New York Times article:

The questions [from employees] captured a profound sense of loss afflicting a company that had once defined modern magazines, although it was not yet clear what would become of it under its new minders.

“It was a once very powerful, very important, very profitable force in the global publishing industry and an important player in the journalism world,” John Huey, the editor in chief of Time Inc. from 2006 to 2012, said on Monday. “It’s now a severely wounded animal.”

To sum this up: The Koch Brothers have helped keep Time and its stable of publications viable with its equity arm’s investment. KED will maintain a distance from the editorial operations, despite the fact a lot of people on the right would like to see them champion conservative thought in traditional media publications, or at the very least, ease up on hostility to conservatives. And Time employees are likely in better shape with their jobs as a result of the acquisition.

They might want to look up the word gratitude.

Meredith’s top executives seem happy about the deal, with Stephen M. Lacy, the chief executive, calling it a “transformative” moment for the Meredith Corporation.

With its distance from the deal’s structure, the Koch brothers would not quite fit the trend of magnates who have turned to publishing investments, notably Amazon’s Jeff Bezos takeover of the Washington Post, which has veered even more left in its editorial coverage and tone, and casino magnate Sheldon Adelson’s ownership of the Las Vegas Journal Review, which backed then-candidate Donald Trump.

Time has been struggling to keep revenues stable amid falling subscribers and advertising dollars and the inexorable decline of print margins in a world of digital media. Last summer, it targeted $400 million in spending cuts and planned more layoffs of about 4% of its staff.

In August, Reuters reported that Time reported a loss of $44 million, or 44 cents per share in the second quarter, compared with a profit of $18 million, or 79 cents per share, a year earlier, on revenues of $694 million, down 9.7% from the same period a year-ago.

At any rate, the Time, Inc., stable of magazines live on under new ownership that is one of the most profitable in all of magazine publishing. Analysts rate Meredith stock, which trades in the $60 range, a “strong buy,” which is not something you see in the mature world of print publishing these days.

Meredith’s revenues in its first fiscal quarter for 2018 were $393 million, compared to $400 million in the prior-year period in which it took in $15 million worth of political advertising. So it’s doing well after an outlier year of 2016’s election-year spending.

The magazine division’s operating profit grew 4 percent to $25 million, “driven primarily by lower operating expenses in Meredith’s magazine business.” Its broadcast properties deliver the lion’s share of its overall profit.

Meredith will continue to print its titles on tissue-thin paper. Time, itself printed on tissue paper these days, will be in good company. It’s all about keeping print costs to a minimum with magazines today.

Although the big news about the deal is about positioning digital properties for content and reach, digital advertising on average comes nowhere near the margins that print publishing still squeezes out, even as its subscriber base shrinks.

Digital is ascendant. For now, at least, the printed word remains.

Why Net Neutrality Rules Are on the Block

The Federal Communications Commission made its plans to undo the Obama-era “Net Neutrality” rules official Tuesday, saying it will roll back the regulations that govern how internet service providers price and deliver their services.

The vote is scheduled for the FCC’s Open Meeting on Dec. 14th and is expected to prevail along party lines with three Republican commissioners voting yes and two Democrats voting no.

Depending on where you stand on the rules, this is the “end of the internet as we know it,” as Google and Facebook put it, or the end of heavy-handed regulations that do nothing to balance out access to the internet for consumers and businesses whose model depends on high-speed delivery of content and services.

The rollback is a win for ISPs such as Comcast, Verizon and AT&T.

The debate often came down to whether the ISPs were guilty of something that might, or could happen, such as “throttling” back some of their customers’ access to the internet during big-load times, especially streaming companies like Netflix who need massive amounts of bandwidth to deliver their products. This is why Google and Facebook lobbied the Obama administration hard for the Net Neutrality rules.

The difference in coverage and tone of the rule-change news among publications that lean left and right couldn’t be clearer. For example, the New York Times story about the announcement uses ominous words in its lead paragraph (with my emphasis added):

 

The Federal Communications Commission announced on Tuesday that it planned to dismantle landmark regulations that ensure equal access to the internet, clearing the way for companies to charge more and block access to some websites.

For one, companies already charge more for different levels of speeds and access, and it was allowed under the Net Neutrality rules. In order to tame ISPs for “throttling” down some websites or blocking access outright, the Net Neutrality rules essentially called for government cops to police this. That’s a lot of bits to patrol over a theory that the ISPs just might turn away business.

What the FCC is proposing instead is for providers to be clear about their pricing policies for high-speed access, as FCC Chairman Ajit Pai wrote about in a WSJ Op-Ed  Tuesday,

The FCC simply would require internet service providers to be transparent so that consumers can buy the plan that’s best for them. And entrepreneurs and other small businesses would have the technical information they need to innovate. The Federal Trade Commission would police ISPs, protect consumers and promote competition, just as it did before 2015.

But that won’t stop the issue from becoming a rallying point, as the NYT continued:

The action immediately reignited a loud and furious fight over free speech and the control of the internet, pitting telecom giants like AT&T against internet giants like Google and Amazon, who warn against powerful telecom gatekeepers. Both sides are expected to lobby hard in Washington to push their agendas, as they did when the existing rules were adopted.

Reuters played its coverage mostly down the middle and picked up on the angle that Blue states or Democratic lawmakers might try an end-run around the FCC’s rule-making authority:

Pai said his proposal would prevent state and local governments from creating their own net neutrality rules because internet service is “inherently an interstate service.” The preemption is most likely to handcuff Democratic-governed states and localities that could have considered their own plans to protect consumers’ equal access to internet content.

The coverage of this is a little off the rails in many places. PopularMechanics’ article about the change reads like a grassroots activist site rather than a publication about, I don’t know, popular mechanics, with this headline that outdid even Democratic Rep. Nancy Pelosi in its tone:

FCC Is Revving Up to Destroy the Internet As We Know It“: Net neutrality is under attack and only collective action can save it.”

Geez people, take a breath. Do we really want 1930s-era regulations meant for an early version of Ma Bell to craft Net Neutrality rules governing a highly technical field that is constantly innovating? Rather than destroying the internet as we know it, the idea is to create conditions to deliver faster data transfer speeds like 10 gigabit ethernet and other innovative networks to the market faster.

And yes, those new levels of service will probably cost more than barely-broadband speeds, at least at first, just like any shiny new tech rollouts costs more such as the latest iPhone.

Once upon a time, most internet citizens objected to any rules to regulate the internet, no matter their political views. After all, the Telecommunications Act of 1996, signed by Democratic president Bill Clinton, called for an internet “unfettered by Federal or State regulation.” No more. This issue is a Democrat-regulation fight vs. a Republican, free-market argument.

More than anything, the fight over the rule-change is a testament to how important the internet, and the web that runs on top of it, have become to daily life. The concept of Net Neutrality boils down to whether we trust ISPs to deliver what we pay for, or whether you trust the federal government stepping in to regulate what is fast becoming a public good.

And that prospect gets to the question of whether you trust the government to somehow police the ISPs on how much bandwidth they deliver to customers by layering over existing regulations a swath of new ones based on a theory that includes ISP cops.

Or do we leave the private sector to innovate and support competition that drives pricing for different levels of service — and leave it to the FTC or the FCC to fine providers when they skirt the rules or abuse their market position?

After all, how many of us cough up the extra $10 a month for data service each month to ensure Netflix movies stream in high-def — only to see nothing but pixels on a Friday night when everyone’s streaming and junior’s playing video games online with his buddies? We all have issues with our ISPs at times.

Like the ISP’s quality of service on busy nights and for busy customers, the question behind the Net Neutrality rules was always about whether they actually deliver what they promise.

It’s time to let the market forces work the way they’re supposed to and unleash more innovation. That’s how you ensure everyone has more access at different price points. That’s how you watch Netflix movies with pixels in all the right places.

DoJ Sues to Block AT&T-Time Warner Vertical Giga-Deal

DoJ Sues to Block AT&T-Time Warner Vertical Giga-Deal

AT&T and the Department of Justice are headed to federal court over antitrust issues with its Time Warner merger. The stakes look as high as 1984, when the DoJ won its antitrust case and broke up Ma Bell.

Now the antitrust civil suit is over the AT&T/DirectTV-Time Warner merger, valued lately between $85 billion to $108 billion, which the DoJ’s civil antitrust lawsuit says would hurt competition and result in higher prices and less innovation for millions of Americans.

According to the 23-page complaint, filed in the United States District Court for the District of Columbia Monday, the combined company would use its control over Time Warner’s “valuable and highly popular networks to hinder its rivals by forcing them to pay hundreds of millions of dollars more per year for the right to distribute those networks.”

And, this being AT&T, the DoJ is worried about competition and the combined companies’ power to slow the industry’s transition to new and exciting video distribution models that provide greater choice for consumers, resulting in fewer innovative offerings and higher bills for American families.

The deal has created “strange bedfellows” of conservative and liberal-leaning groups joining in their opposition to the merger, which the Breitbart columnist known as Virgil notes also that Google-Facebook content distribution competition is at play, albeit not in the deal, as is the demise of local broadcasting with these mergers:

Today, just two digital companies—Alphabet (Google) and Facebook—have formed a duopoly; they now take in more than 60 percent of all the advertising in America. This duopolistic control has siphoned away money from every other media sector, including television (Those two Silicon Valley companies, of course, are notorious for their liberal politics and algorithm-based biases—but that’s a tale for another time.).

And it takes note of President Donald Trump’s comments on the merger in October of 2016, when he said:

“As an example of the power structure I’m fighting, AT&T is buying Time Warner and thus CNN, a deal we will not approve in my administration because it’s too much concentration of power in the hands of too few.”

CNN’s hostility to the President speaks for itself if you watch the network on any given day. The president often pushes back on Twitter about CNN’s coverage of the administration.

But with conservative and liberal groups finding common ground in their opposition to the merger, much more is at play here.

We’re way past the term mega-mergers in these tie-ups among cable and video network providers for control of data, video, voice and all the content that travels over their networks of wired and wireless varieties and around the globe.

These are giga-media deals that want to capture audience share wherever it goes, including wayward cord-cutters and mobile-video watchers fleeing bloated and pricey cable bundles for just the content they want to consume.

Vertical deals are one of the paths to keep those customers, no matter how they consume content, be it over the cable-networks’ (DOCSIS 3.0) standard or Internet Protocol (IP) networks. Wherever users flock to escape the expensive bundle of programming they have to buy just to enjoy Game of Thrones on HBO or live sports, this merger tie-up would be ready to assist them as they look for other means of content distribution.

As more content, and live sporting events are streamed over the web, vertical integration deals, such as this one that marries up suppliers of content with distributors of content, are likely to get more scrutiny than they historically receive from antitrust law and policies compared to horizontal deals that tie up producers of the same or similar good, such as car companies consolidating their market share.

AT&T/Direct TV and Time Warner get that, as does the DoJ, which points out.

As AT&T itself has expressly acknowledged, distributors with control over popular programming “have the incentive and ability to use . . . that control as a weapon to hinder competition.”  And, as DirecTV itself has explained, such vertically integrated programmers “can much more credibly threaten to withhold programming from rival [distributors]” and can “use such threats to demand higher prices and more favorable terms.”

By way of history, this fight would bring AT&T back into court to face its DoJ nemesis from the 1984 antitrust ruling that led to the Bell breakup, which begat AT&T and “Baby Bells,” the seven regional Bell operating companies formed after the break-up.

Economic historians might be looking back at the Regional Bell Operating Companies (RBOCs) to understand where we are today in the great merging of data/voice/video distribution in the hands of fewer providers.

The path wends through some of hard lessons learned from the battles among regional the regional Baby Bells and data-networking start-ups. The Bells were obligated to allow competitive start-ups to access their networks and compete with them at the same time, while allowing media cross-ownership ushered in as a result of the 1996 Telecommunications Act.

It didn’t turn out well for the start-ups in data networking, known as competitive local exchange carriers (C-LECs), which went down in flames when the dot-com bubble burst. They had other problems, such as too much capital chasing too few profits and dot-com mania for deals. But the prospect of a data and networking provider also competing with its supplier, the Baby Bells, was the real killer. Why not just own the whole caboodle instead?

The DoJ’s complaint gets at the stakes with the vertical deal:

“The combination of AT&T/DirecTV’s vast video distribution infrastructure and Time Warner’s popular television programming would be one of the largest mergers in American history.  Time Warner’s network offerings include TBS, TNT, CNN, Cartoon Network, HBO and Cinemax, and its programming includes Game of Thrones, NCAA’s March Madness, and substantial numbers of MLB and NBA regular season and playoff games.”

We’ll see you in court, says AT&T.

David R. McAtee II, the company’s general counsel, says vertical mergers like this one are routinely approved because they “benefit consumers without removing any competitor from the market. We see no legitimate reason for our merger to be treated differently.”

Bloomberg points out that the deal could be put a damper on mergers and acquisitions, too:

“I think this has put a wet blanket over consolidation around the whole space,” Christopher Marangi, co-chief investment officer of Gabelli Funds, said in a Bloomberg TV interview. “A lot of companies are going to be watching this case very closely.”

It has this media observer going back to another era in landmark antitrust cases, 1984, because it resulted in a break-up of Ma Bell. One of the remedies bandied about on the AT&T/Time Warner hook-up is that it would be forced to sell off some of the assets in the merger deal, such as CNN. AT&T has pushed back on that.

Update: But why stop at 1984? We could argue it actually feels like 1914, given that the DoJ’s case cites the Clayton Act of that vintage, which is an extension of the Sherman Act of 1890 and the Federal Trade Commission Act of 1914, which restricts “the formation of cartels and prohibits “other collusive practices regarded as being in restraint of trade.”

James Rosen of Fox News boils it down in his concise way that the future of antitrust policy and case law are at play in this case, given that one of the largest internet and telephone providers is intent on acquiring a well-known producer of content.

We’re about to see a 21st Century wallop of a fight over who controls a significant portion of media, content, data access and voice services in our country and the world — and who controls much of the pipes to not only push it, but charge competitors for access.

Can New York’s Mass Transit System Get Any Worse?

Can New York’s Mass Transit System Get Any Worse?

[Updated 11/19/17]

This “About New York” column by Jim Dwyer in the New York Times about the woeful experience that the New York City subway is these days brought back to mind all those $20 cab rides I paid for with increasing frequency to get to work without dealing with the overcrowding underground and still loving my fellow humans.

That was before Uber or Lyft. It started to add up before I finally moved out of the city. I wasn’t the only one quitting the subway.

Turns out ridership is still adding up in the negative for the transit system, as Dwyer reports:

The number of people taking the subways dropped last year, and through the first nine months of this year is down by nearly 17 million over the same period in 2015.

“The correlation between employment and ridership has broken down,” Tim Mulligan, a senior vice president at New York City Transit, told members of the Metropolitan Transportation Authority board this week.”

The reasons for the decline are many.

As ridership was growing, service was being cut. Fewer trains are running today than in 2007, and those that are running break down more often. More than 2,000 jobs in critical areas like repairing signals, tracks and cars were unfilled. By last year, subway cars that were bought in the 2000s were failing more frequently than ones that had gone into service 25 years earlier.

Other NYT reporters dig up plenty of reasons leading to failed system that the transit is these days, and it makes for a head-shaking read:

A rush-hour Q train careened off the rails in southern Brooklyn. A track fire on the A line in Upper Manhattan sent nine riders to the hospital. A crowded F train stalled in a downtown tunnel, leaving hundreds in the dark without air-conditioning for nearly an hour. As the heat of packed-together bodies fogged the windows, passengers beat on the walls and clawed at the doors in a scene from a real-life horror story.

In June, after another derailment injured 34 people, Gov. Andrew M. Cuomo declared that the system was in a “state of emergency.”

Century-old tunnels and track routes are crumbling, but The Times found that the Metropolitan Transportation Authority’s budget for subway maintenance has barely changed, when adjusted for inflation, from what it was 25 years ago.

Signal problems and car equipment failures occur twice as frequently as a decade ago, but hundreds of mechanic positions have been cut because there is not enough money to pay them — even though the average total compensation for subway managers has grown to nearly $300,000 a year.

Daily ridership has nearly doubled in the past two decades to 5.7 million, but New York is the only major city in the world with fewer miles of track than it had during World War II. Efforts to add new lines have been hampered by generous agreements with labor unions and private contractors that have inflated construction costs to five times the international average.

New York’s subway now has the worst on-time performance of any major rapid transit system in the world, according to data collected from the 20 biggest. Just 65 percent of weekday trains reach their destinations on time, the lowest rate since the transit crisis of the 1970s, when graffiti-covered cars regularly broke down.

The full article is here.

The Uber factor is a huge reason that ridership is down so much as Dwyer documents. It’s clear in the reporting in both pieces that riders are just fed up with a subway experience that grinds them down: the missed auditions, late for meetings, the constant outages, the overcrowding, the horror stories of being trapped on a stalled train underground.

But the Times article also makes clear how years of bad decisions by political leadership and cronyism have mismanaged the transit system’s budget:

“…[Public] officials who have taken hundreds of thousands of dollars in political contributions from M.T.A. unions and contractors have pressured the authority into signing agreements with labor groups and construction companies that obligated the authority to pay far more than it had planned.

Faced with funding shortfalls, the M.T.A. has resorted to borrowing. Nearly 17 percent of its budget now goes to pay down debt — roughly triple what it paid in 1997.

“It’s genuinely shocking how much of every dollar that goes to the M.T.A. is spent on expenses that have nothing to do with running the subway,” said Seth W. Pinsky, the former head of the city’s Economic Development Corporation. “That’s the problem.”

It’s beyond sad to see how much worse the situation has become for the 113-year old system, the third-oldest subway in the world after London and Boston’s MBTA, but by far the largest in the United States. It’s a total failure by elected leaders to serve the very riders the system is supposed to serve.

The examples riders post of the daily dysfunction in their commute are everywhere on Twitter and social media. It’s become kind of a cottage industry to document them. Newsday’s roundup is here.

“It’s like a zoo out there,” wrote one Twitter poster while observing a rider feeding…a racoon.

Here’s one of a banana peel stuck to a retaining wall in the subway. Then again, this could be seen a public service so no one slips on it while going about their business.

And we thought the pole-dancing rat on a Queens-bound train took the cake. Far from it.

Last summer’s train outage of an F train in lower Manhattan for 45 minutes to about an hour, with no air-conditioning, was no laughing matter. Sitting through a stalled train outage for just a few minutes with power cut in a crowded car with no air can turn riders panicky.  After about 10 minutes, it becomes a real-life scare.

In this case, the stalled F train eventually had to be pushed into the Broadway-Lafayette Station. As the train nudged into the station, a passenger caught the scene:

The video clip says it all:

It makes the pole-dancing rat look downright tame by comparison.

Can the transit system be saved? The bigger question, in our view, is whether state and city leaders have the political will to stand up to the special interests who help elect them and then run up costs. The sheer scope of the problems outlined in the articles is stunning. Hang in there, New York.

The Shale Effect: Shell Starts $6-billion PA Ethane Cracker Plant

The Shale Effect: Shell Starts $6-billion PA Ethane Cracker Plant

Shell Chemicals has broken ground on a $6-billion ethane cracker plant in Potter Township in Pennsylvania’s Beaver County north of Pittsburgh, which is expected to create about 6,000 construction jobs and some 600 permanent ones when it goes online. It’s a big new chapter in the state’s fracking boom story.

The plans include the construction of a 250-megawatt natural gas-fired power plant, which will produce electricity and steam to run the cracker plant, according to local publication Beaver County Times, which has been tracking the project for years. “About one-third of the electricity produced at the site will help supply the local electrical grid,” the Times says.

The Times and Shell say the facility would produce 1.6 million metric tons of polyethylene, which is used to make products such as plastic wrap, sports equipment and car parts.

The source of the feedstock materials that the cracker plant will produce comes from the natural gas and gases drilled from the Marcellus shale and Utica basins that spread throughout a big chunk of the Northeastern United States, including Pennsylvania and upstate New York, which officially banned fracking in 2015. Natural gas production has surpassed coal production in Pennsylvania, long a mainstay of the state’s economy.

The project start caps a multi-year effort by Shell to get the project into approval, including working with environmental groups whose only goal is to stop anything related to fracking.

For example, environmental protest group PennFuture launched an attack on a $1.65 billion tax-incentive package given in an effort to lure Shell to the central part of the state. “Because the cracker plant is expected to create 600 full-time jobs, PennFuture said the subsidy is worth approximately $2.67 million per job.”

Well, clearly PennFuture has not calculated the multiplier effect when 600 locals are using the proceeds from their salaries to buy homes, home goods, cars, food and other goods and services that stimulate an economy. So we’d like to revisit the net effects of the plant on the economy after it opens. For now, 6,000 construction jobs will have to do.

PennFuture is running ads that the Shell plant will emit pollutants such as sulfur dioxide, benzene and toluene, which exacerbate symptoms of asthma and can cause cancer, it claims.

Shell, for its part, has agreed to “fence-line monitoring” around the plant as part of its permitting approvals and by using emission offsets to address air quality in the region, according to spokesman Joe Minnitte.

The environmental fight against the plant will go on; but it’s hard to argue with the economic benefits and next-stage products that fracking is bringing to Pennsylvania since the boom gained traction in 2007.

The state “had the second-largest employment increase over [2007-2012], positioning itself only after Texas, a major oil- and natural gas-producing state,” according to the Bureau of Labor Statistics.

“Most of Pennsylvania’s substantial employment gains in the oil and natural gas industry were due to the recent surge in shale gas production brought about by the drilling in the Marcellus Shale.

“Pennsylvania had the second-highest increase in gross withdrawals (2.0 trillion cubic feet) from 2008 to 2012, trailing only Louisiana in this regard.8 As a result, Pennsylvania went from being the 10th-largest state by oil and natural gas employment in 2007 to being the 6th largest in 2012.”

PennsylvaniaFracking.com, an industry group, says fracking jobs in Pennsylvania pay on average “$62,000, which is around $20,000 higher than the state average.” It also cites a study by Natural Resources Economics that says full development of the Marcellus Shale play in Pennsylvania could support 211,000 jobs.”

Hydraulic fracturing as a technology and technique to extract gas and oil from shale formations has been around since the 1940s. But the technique has improved in recent decades, which has sparked the fracking boom that is re-shaping the United States as the world’s leading energy producer.

“The United States’ status as a net exporter of natural gas is expected to continue past 2018 because of growing U.S. natural gas exports to Mexico, declining pipeline imports from Canada, and increasing exports of liquefied natural gas (LNG),” according to the U.S. Energy Information Administration.

Opponents of fracking will argue that fracking creates jobs, just not that many. Or that the wage increases in the industry are not all that great. One fact not in dispute: The U.S. is emerging as a world leader in energy production, which is re-shaping the geo-political map:

“The United States remained the world’s top producer of petroleum and natural gas hydrocarbons in 2016 for the fifth straight year despite production declines for both petroleum and natural gas relative to their 2015 levels,” the EIA adds.

“The United States has been the world’s top producer of natural gas since 2009, when U.S. natural gas production surpassed that of Russia, and it has been the world’s top producer of petroleum hydrocarbons since 2013, when its production exceeded Saudi Arabia’s.”

These are good jobs, too, especially for welders, a skill in short supply in energy-production regions such as Louisiana and Texas.

For Pennsylvania’s short term, 6,000 construction jobs will do quite a bit to stimulate the region’s economy. Long-term, the Keystone state will play a key role in the ecosystem of the nation’s energy economy.

No Toll Hikes in N.Y. (at Least for 2018)

No Toll Hikes in N.Y. (at Least for 2018)

The New York Thruway’s budget is holding the line on toll hikes in its 2018 budget. The Times Herald-Record, reporting from Albany on the authority, says:

“The New York State Thruway Authority adopted a 2018 budget Monday that keeps tolls flat for the eighth consecutive year.

The $1.56 billion budget, a 2.7 percent increase over 2017, includes $342.6 million in operating expenses and $863.3 million in capital expenses, with $458.8 million going toward the new Tappan Zee Bridge.

We wonder if the toll holiday will last until 2020, as Gov. Andrew Cuomo has pledged Given the cost of the bridge, which has a $4 billion price tag but roughly $400 million still unfunded, something’s got to give and likely it will be folks who drive over bridges.

The AP’s had tallied that the state has dedicated $2 billion from bank settlements and $1.6 billion from a federal loan to fund the project. We’ll keep an eye out on where the $400 million for the rest of the project comes from. But for now, 2018 appears to be a no-toll-hike year for the people who pay to cross New York’s bridges and tunnels.

 

Facebook’s Founder: Platform Built for ‘Dopamine’ Hits to Brain

Facebook’s Founder: Platform Built for ‘Dopamine’ Hits to Brain

It’s hard to ignore the comments about social media coming from one of the founders of  Facebook, Sean Parker, in a recent interview with Axios’s Mike Allen.

He’s become a “conscientious objector” about social media. We’ll take that to mean he deploys less of it on a daily basis because of how addictive it is.

For parents worried about their kids getting too “high” off dopamine hits to their brains with each FB like and comment,  Parker’s video (posted below) about the kind of psychology he and his co-horts exploited when they created the platform, is a must-watch.

Axios’ Allen writes of Parker’s recall of the early FB days:

Parker’s I-was-there account provides priceless perspective in the rising debate about the power and effects of the social networks, which now have scale and reach unknown in human history. He’s worried enough that he’s sounding the alarm.”

“Parker, 38, now founder and chair of the Parker Institute for Cancer Immunotherapy, spoke yesterday at an Axios event at the National Constitution Center in Philadelphia, about accelerating cancer innovation. In the green room, Parker mentioned that he has become “something of a conscientious objector” on social media.”

Not to say I don’t enjoy connecting with friends and making new ones on FB in ways that have enriched my life. But he speaks for many of us who see social media as a modern day reality distortion field that has an undue influence on what we see and consume, which is an influence all its own.

Other Parker quotes that caught my eye:

“When Facebook was getting going, I had these people who would come up to me and they would say, ‘I’m not on social media.’ And I would say, ‘OK. You know, you will be.’ And then they would say, ‘No, no, no. I value my real-life interactions. I value the moment. I value presence. I value intimacy.’ And I would say, … ‘We’ll get you eventually.'”

And did they ever, up to some 2 billion around the world who are on the FB platform today, according to the site.

The idea that, if you’re not “on” FB (sounds like a drug, doesn’t it?), they will “get you eventually” — like a drug dealer who gives it away until you’re hooked (I’ll stop). It has the feel of this:  Resistance is futile. You will join the rest of the world on the platform or be left behind as a social outcast, or something.

This is why we see the growing power of Facebook — and Google for that matter  — eventually coming under pressure from Congress over how they influence the news and information so vital to a healthy, open society.

Facebook founder Mark Zuckerberg’s politics are classic Silicon Valley left-liberal views that raise the question of whether it is “putting the thumb on the scale” of how it weights trending topics and news, as Sen. Ted Cruz, a conservative leader, framed the issue recently.

Axios, in another report that ensures they carved ownership of this ongoing issue, says Silicon Valley has a guilty conscience about the addictive nature of their platforms. They note some examples, including a link to a recent 60-minutes report describing how Google engineers its apps to get us good and hooked.

Despite all this tech wizardry, are Facebook and Google really tech companies anymore? When they deploy their own black-box algorithms to decide what type of news we consume while logged into their platforms, aren’t they are acting as media companies that happen to deploy it with Web 3.0 technology?

The other quote that jumps off the page:

“I don’t know if I really understood the consequences of what I was saying, because [of] the unintended consequences of a network when it grows to a billion or 2 billion people and … it literally changes your relationship with society, with each other … It probably interferes with productivity in weird ways. God only knows what it’s doing to our children’s brains.”

Article and video are here.

California: Praying For Rain, Calm Winds

California: Praying For Rain, Calm Winds

California’s wildfires, day eight: More than 40,000 people are out of their homes, reportedly down from 100,000;  the death toll is at 41, mostly in Sonoma and Napa Counties.

My brother and sister in-law live in Mendocino County. Other areas just seven miles north of Ukiah where they live are flattened, out of the 200,000 acres of land the fires have scorched as approximately 11,000 firefighters battle the siege.

But they are nervous, humbled at nature’s power and watching the weather forecast for rain, expected by next week.

Although they have been spared, family has been evacuated from Redwood Valley, co-workers have lost their homes and his employer is keeping workers on standby in case the fires take out generating stations at the power plant where he is a manager.

I talked to him last night about his experience. He offers these observations:

Once the wind gets going, it creates its own firestorm. They burn crazy hot. You have the firestorm created from it.

All this fuel and the fire in the air just goes shooting up. It’s like a blowtorch, and sucks in this air behind it. They can create their own 40-mile winds. And once the air gets into it, it just feeds itself.

Ukiah, for some reason, hasn’t been getting the Santa Ana winds. The weather reports will show winds of 25-30 MPH in Santa Rosa. And then Ukiah is just zero. It’s crazy. Dead calm. Meanwhile, you can’t get a hotel anywhere for 80 to 90 miles, so many people have been forced from their homes.

What is so deadly about these fires are the embers. The smallest pine cone catches fire then explodes and spreads more embers, which feeds the fires.

Seven miles up the road from their home, authorities are recovering bodies, the fires came up so fast and overtook residents’ homes overnight.

My co-worker lives on a two-acre lot in Redwood Valley and he happened to be up after he heard a big explosion. The wind had blown one of his trees over, snapped it in half. He went out and down the road a ways to discover embers and fires moving his way. He ran back.

Once he let his goats and horse out, he threw rocks at his neighbors’ houses to wake them up. He tried to grab his guns and his wife’s jewelry but forgot to as his house was already ablaze and they had to flee.

The L.A. Times picks up on “all the signatures of a massive, Southern California Santa Ana wind event. Driven by hot, dry winds blowing a sustained 50 mph, the Tubbs fire — one of the most destructive of the wine country blazes — chewed across a small mountain range in a few hours on the night of Oct. 8 and roared into northeastern Santa Rosa.

“Local officials estimate the city of 177,000 lost nearly 3,000 homes, or roughly 5% of its housing stock. Even big-box stores and a Hilton hotel next to Highway 101 went up in flames.”

My brother continues: They’re fighting the fires in the Redwood Valley to the North and the pocket fire to the south, which is threatening the geysers now.

Fortunately the wind has been blowing north and south, which is how the mountains run. It sucks for people in the wineries in the mountains.

Why do these rage every couple of years? Well, the drought conditions for one, the dry grass, and the fact that [the state] doesn’t do controlled burns like they used to and they don’t clean up the deadwood off the forest floor. And they don’t let people do that anymore. You can’t even pick up up driftwood off the beach in California. It’s like it’s the King’s woods now.

Calif. Wildfires Leveling Homes, Infrastructure

Calif. Wildfires Leveling Homes, Infrastructure

[Updated 10/14/17] California’s wildfires have reportedly claimed 36 lives  in Napa and Sonoma County’s wine country after laying waste to homes, businesses and utilities with a swift and brutal devastation in what is becoming annus horribilis for major swaths of the region’s and nation’s infrastructure from natural disasters.

Some 3,500 businesses and homes went up in flames since the fires broke out on Sunday and hundreds are still missing.

“It’s an extremely stressful and challenging time,” said Office of Emergency Services Director Mark Ghilarducci to the L.A. Times. “We are all hands on deck.”

“The two biggest and most destructive fires had consumed more than 70,000 acres in Napa and Sonoma Counties by Wednesday morning, up from 52,000 on Tuesday afternoon, according to Cal Fire, the state’s firefighting agency,” the New York Times reported Wednesday. “In all, six fires had burned more than 91,000 acres in the two counties, and Cal Fire rated all but the smallest of them as 3 percent contained, or less.”

Officials are reportedly looking into whether downed power lines could have sparked the blaze amid the historically October dry season in Northern California.

“There were some reports of sparking power lines and other electrical equipment problems over the weekend,” the New York Times reported. “And poor power-line maintenance by the main utility in Northern California, the Pacific Gas & Electric Company, has been blamed for some past wildfires.”

PG&E has a spotty history in infrastructure disasters. The San Bruno natural gas pipeline is one recent case in point. A federal jury in 2016 found the utility, California’s largest, guilty of “violating pipeline safety regulations before a deadly natural gas pipeline explosion in the San Francisco Bay Area and then misleading investigators about how it was identifying high-risk pipelines.” The explosion killed eight people and destroyed 38 homes.

We will learn more as the investigation into the wildfires unfolds. But what a year 2017 has become for infrastructure rebuilding.

Working backwards, Puerto Rico’s tax base has been flattened after Hurricane Maria hit the island territory, wreaking an estimated $90 billion in damages. Between the military response and FEMA staff, some 17,000 officials are working to get the island’s critical infrastructure back online. It will take months and years to rebuild.

In Southeast Texas, the cleanup is just getting underway after Hurricane Harvey wreaked the greater Houston area, which  Gov. Greg Abbott of Texas has called “one of the largest disasters America has ever faced.”

And Florida is just getting started in its rebuilding after Hurricane Irma hit the region and has so far eased certain regulations in counties in FEMA’s disaster declaration zone.

It’s a picture of heartbreaking devastation for the families who lost loved ones and property in the fast-moving fires.

A rough year for infrastructure, but heralding a big year ahead for rebuilding infrastructure.

Nicholas Carr on Smartphones: They ‘Hijack Our Minds’

Nicholas Carr on Smartphones: They ‘Hijack Our Minds’

Nicholas Carr has done it again. The best-selling author and leading light chronicling technology and digital media’s impact on our way of life, our way of thinking—our brain function even—published a thought piece in the Saturday WSJ that compiles a comprehensive array of research about smartphones’ effect on our brains.

Entitled, “How Smartphones Hijack our Minds,” the piece’s premise is that, as the brain grows dependent on phone technology, the intellect weakens.

It is a must-read, especially for parents wondering and worrying about how much access to smartphones and social media apps they should allow their children to access when they are still developing an understanding of their identities.

“The smartphone has become a repository of the self, recording and dispensing the words, sounds and images that define what we think, what we experience and who we are. In a 2015 Gallup survey, more than half of iPhone owners said that they couldn’t imagine life without the device.

Carr rightly points out the good in our smartphones — the amazing utility and services, including sometimes decent phone service — all rolled into a handheld device that helps us run busy lives, and make it hard to detach ourselves, too.

Imagine combining a mailbox, a newspaper, a TV, a radio, a photo album, a public library and a boisterous party attended by everyone you know, and then compressing them all into a single, small, radiant object. That is what a smartphone represents to us. No wonder we can’t take our minds off it.

But ponder if you will the anxiety they also breed.

“So what happens to our minds when we allow a single tool such dominion over our perception and cognition?”

Carr has rounded up a bevy of research from scientists exploring that question—and what they’re discovering is both fascinating and troubling:

Not only do our phones shape our thoughts in deep and complicated ways, but the effects persist even when we aren’t using the devices.

“A 2015 Journal of Experimental Psychology study, involving 166 subjects, found that when people’s phones beep or buzz while they’re in the middle of a challenging task, their focus wavers, and their work gets sloppier—whether they check the phone or not.

The research he quotes suggests we tend to believe everything we get on our smart phones — and even conflate our mental capacities with what’s stored there.

“When people call up information through their devices, they often end up suffering from delusions of intelligence. They feel as though ‘their own mental capacities’ had generated the information, not their devices.”

Here’s an adjunct idea to takeaway with this thoughtful piece: If we’re pondering the power that smartphones hold over our way of thinking and behavior, what about the purveyors of the data that feed those smartphones?

And by that, I mean Google and Facebook, the dominant platforms that influence how and what we consume for news and information on those devices.

The Economist pointed out back in May that the “world’s most valuable resource is no longer oil, but data,” and posits that the data economy demands a new approach to antitrust rules.

The pressure to rein in their dominance is building. David McCabe of Axios wrote in August that both sides of the political spectrum are  “increasingly wary of the outsized role that Facebook and Google play as moderators of public discourse.”

Google is also reportedly offering concessions to European regulators after the European Union slapped the search giant with a record $2.8 billion fine over how it positions its own service at the expense of rivals.

Given Google’s political leanings (big supporter of Democrats, not so friendly to conservative thought), conservatives have every right to be wary of Google’s practices. Breitbart.com reported last month that “Gab, the free speech social network, has filed a [antitrust] lawsuit against Google after they were suspended without warning from Google’s Play Store last month.”

The site’s executive chairman and former White House strategist Steve Bannon has also reportedly floated the idea of treating these companies as utilities. His fellow conservative, Sen. Ted Cruz (R-Texas), told Axios.com that he’s worried about “large tech companies putting their thumb on the scales and skewing political and public discourse.”

Which brings us back to the commoditization of news and data that’s flowing into those influential smartphones we all carry. It’s one of the reasons I’ve been an admirer of Carr’s work ever since his 2003 column in the Harvard Business Review, IT Doesn’t Matter, shook up the IT and enterprise software worlds with similar arguments about how IT and networks become commoditized.

Fourteen years ago, he claimed that “IT Doesn’t Matter” anymore because its near ubiquitous adoption in corporate America has rendered it as a commodity, much like electricity is considered today, as I wrote at the time.

Carr wrote that “the rapid affordability of IT functionality has not only democratized the computer revolution, it has destroyed one of the most important potential barriers to competitors. Even the most cutting-edge IT capabilities quickly become available to all.” He was right about the era of utility computing we are in now, albeit in its early stages.

He picks up on the thread in his 2008 book “The Big Switch (Rewiring the World, from Edison to Google),” to help us understand this “World Wide Computer,” into which our smartphones now plug our brains.

“And what of our brains? As we come to rely ever more heavily on the Internet’s vast storehouse of information as an extension of or even a substitute for our own memory, will it change the way we think? Will it alter the way we conceive of ourselves and our relationship to the world? As we put ever more intelligence into the web, will we individually, become more intelligent or less so?”

Suffice to say, it’s worth the full-read and some thoughtful reflection, if only to engage our brains in a bit of long-form thinking that in my view, smartphones help to short-circuit. Unplug and give it a think, I say.

Fun Times with AOL Instant Messenger

Fun Times with AOL Instant Messenger

The news this week that AOL would be ending its Instant Messaging service after a 20-year run deserves a comment or two on its cultural impact during its heyday in the late 90s and early aughts.

In a post on Tumblr this week, Michael Albers, VP of communications product at Oath, presumably speaking on behalf of AOL, wrote that the service would cease on Dec. 15th of this year:

AIM tapped into new digital technologies and ignited a cultural shift, but the way in which we communicate with each other has profoundly changed.

He didn’t really go into whys or wherefores of how we communicate today that has doomed AIM now. After all, another AIM-like platform, Google hangouts is, well, hanging in and it still rides on an IM platform. In my view, AIM is ceasing because its parent company AOL never really figured out how to reinvent itself beyond its early years as a dial-up internet service provider.

No doubt Albers is referring to the fact that, when AIM was all the rage back then, mobile networks and devices were in their infancy. The iPhone’s debut was years away, the Palm Treo, running on a low-bandwidth dial-up connection, was considered a cutting edge device, and watching videos online was still a herky jerky experience of dropped packets and lousy codecs, if I may get in touch with my inner geek for a joyful memory or two, while digging up some of our old stories from InternetNews.com about the struggles of AOL in the broadband era.

Albers picks up on some of AIM’s cultural influences:

If you were a 90’s kid, chances are there was a point in time when AOL Instant Messenger (AIM) was a huge part of your life. You likely remember the CD, your first screenname, your carefully curated away messages, and how you organized your buddy lists…You might also remember how characters throughout pop culture from “You’ve Got Mail” to “Sex and the City” used AIM to help navigate their relationships. In the late 1990’s, the world had never seen anything like it. And it captivated all of us.

We used AIM all the time as online journalists in the aughts covering all things internet and web businesses. But we also saw it for what it was: a communications platform that would soon be replaced by something else if it didn’t innovate. Because that’s what online companies do — they innovate “up the stack” or something else will come along and wipe it out with fickle web users without any loyalty to their tools.

But that didn’t stop AOL and the brainiacs at its parent company from its doomed merger in 2000 with Time Warner (the sorriest marriage there ever was in the print-digital world of Mergers and Acquisitions) of trying to “monetize” AIM for a while, when everyone could see that IM would soon be just one more feature integrated into the web platforms of the day.

For example, Wall Street firms, realizing that everyone was downloading AIM and using it to communicate with clients — especially about timely trades and the like, quickly ginned up their own IM service, blocked the use of AIM and rolled out their own versions of IM so they could track and archive messages and stay out of the unwelcome eye of the Securities and Exchange Commission, and legal.

We used it so much at InternetNews.com that it essentially became a requirement that every staffer use it so we could all keep up on our real-time news operations.

No one questioned the policy. But I’m reminded of a story that I think reflects not only the online cultural shifts underway but cultural attitudes about the web at the time as we welcomed a new employee to the parent company I was with at the time, albeit writing for a different coverage vertical. Since we all collaborated at some point to leverage our reporting resources, we looked forward to adding his handle to our list and sending him welcome messages so he could get our handles.

Having just arrived from the world of print and only print, he politely declined to use the IM application. He preferred not to.

His editor (he wasn’t on our side of the house) persisted that he needed to download the IM app. Again, he refused.

So his editor told him that using IM was not only the policy, but a condition of employment. He finally signed up, but treated the exercise as though he was under duress.

He didn’t last in the online world of internet news. It wasn’t his thing. But he was a lovely and very funny person when our lines of work crossed paths. And we always enjoyed his chosen handle: AngryIM.

In  hindsight, I think his problem was a common attitude about online journalism that we saw in many print-only journalists at the time.

Call it a mix of skepticism and a bit of disdain for web publishing, at a time when many big print mags were barely touching a toe in the web world and had no idea what was about to hit the print model.

AIM was fun. And for my money, it changed our attitudes about assuming the web would be our dominant communications and information portal. AIM messages rode in to our computers and workstations and mobile devices on the good ole internet running under the web — and in a way, disintermediated the web.

So, in a way, AIM was a harbinger of the world of texting that would soon arrive, and a harbinger of the app-fueled world we now inhabit. It has earned its place in the cultural history of the web and our times.

AIM may be over, but the fun times with online communications and apps? Oh, those are still on. Not going away.

 

 

Getting it Right When Covering the Gun Issue

Editors in one of the newsrooms I worked in often joked that we should sound a warning alarm when reporters start to do math. This was our way of poking fun at ourselves and a profession populated by liberal arts majors who are more comfortable with words than working with numbers. But plenty of good journos committed to getting the math right admit what they don’t know and figure it out, often with the help of experts.

We’re hoping to see a similar approach by journalists covering the gun debate that we’ve stepped into as a country  — specifically with the “bump-stock” term that is “trending” after Sunday’s shooting massacre of concertgoers in Las Vegas that killed 58 and left hundreds injured, and a nation still reeling in horror, I might add.

Images from the gunman's Las Vegas hotel room leaked to multiple news outlets, show a semi-automatic weapon at left with an apparent "bump stock" attached. (Image originally published by CNN, Daily Mail)

Images from the gunman’s Las Vegas hotel room leaked to multiple news outlets, show a semi-automatic weapon at left with an apparent “bump stock” attached. (Image originally published by CNN, Daily Mail)

The gunman reportedly used a “bump stock” device (seen at left in the image from the gunman’s Mandalay Bay hotel room) to mimic an automatic weapon in his killing spree.

Experts such as AWR Hawkins, who covers the Second Amendment right to bear arms and gun issues for Breitbart.com: says the devices “are add-on accessories that allow a gun owner to briefly mimic automatic fire but they do not convert the gun into an automatic weapon.”

But it does function like one, says Wayne LaPierre, the head of the National Rifle Association, which is why it’s likely to get a closer look at the rules that exist.

Hawkins writes that “in 2010–when bump stocks were approved–the ATF saw no need for additional regulations. Moreover, Rick Vasquez, former acting chief of the Firearms Technology Branch of the ATF, told USA Today that bump stocks were legalized because they are “an accessory, not a conversion device.” And the distinction between “accessory” and “conversion devices” could not be more important; it is the difference between allowing a semiautomatic to mimic automatic fire in short bursts verses actually converting a semiautomatic into an automatic rifle.

So this is what the NRA is calling for, he notes; not a specific piece of legislation banning the devices that Second Amendment supporters see as a slippery slope — but rather a revisit of the federal rules covering these devices.

Despite the fact the Obama administration approved the sale of the bump fire stocks on at least two occasions, writes the NRA’s statement on the issue, the NRA is “calling on the Bureau of Alcohol, Tobacco, Firearms and Explosives (BATFF) to immediately review whether these devices comply with federal law.

“The NRA believes that devices designed to allow semi-automatic rifles to function like fully-automatic rifles should be subject to additional regulations.”

Well, what does that mean? Likely a way to help the base navigate the issue outside of new laws about it.

The Washington Post said “the NRA’s announcement gave political cover to a growing number of Republicans who have indicated a willingness to consider regulating ‘bump stocks,’ devices that allow a legal semiautomatic rifle to mimic the rapid discharge of a fully automatic weapon. Less clear is whether the move signals an opening for further action on an issue that has divided the nation and produced virtually no new restrictions in recent years despite a steady stream of mass shootings.”

Although the president rightly avoided broaching the gun control debate roiling Congress at a time of paying respects during his and the First Lady’s visit to Las Vegas, Democrats are looking at this as a way to leverage further legislation on gun rights.  Republicans are also appear to be going wobbly as well.

The New York Times reported Thursday: “In the House, Representative Carlos Curbelo, Republican of Florida, said he was drafting bipartisan legislation banning the conversion kits. Representative Mark Meadows, the head of the conservative Freedom Caucus, also said he would be open to considering a bill, while Representative Bill Flores, Republican of Texas, called for an outright ban.

“I think they should be banned,” Mr. Flores told the newspaper The Hill. “There’s no reason for a typical gun owner to own anything that converts a semiautomatic to something that behaves like an automatic.”

Not noted in the NYTimes story, however, are how quiet Red State Democrats are about the issue and legislation, notably Sens. Joe Manchin of W. Virginia, Heidi Heitkamp of North Dakota,  Joe Donnelly of Indiana and Claire McCaskill of Missouri.

They may find they align with the WSJ’s Dan Henninger’s take on the issue:

“Gun control is by now the oldest, most sterile, wheel-spinning issue in American politics. It has nowhere to go, but it keeps coming back. Even Democratic politicians have concluded that trying to push gun control beyond federal legislation already on the books is a waste of the party’s energies.

“Nonetheless, on Monday night’s edition of ‘Democrats After Dark,’ virtually every comedian— Jimmy Kimmel, Stephen Colbert, James Corden, Seth Meyers, Trevor Noah —made pleas for more gun control.”

“…The chance that the American people will ever disarm remains zero. Spin on.”

And let’s not forget the brave new world of 3D printing, Congress, which would enable anyone to replicate a “bump-stock” device.

The Washington Post, meanwhile, has ginned up a tally sheet of Senate and House Republicans who have weighed in so far on the issue and potential legislation. For the most part, most of their statements are a lot of “we should be looking into this.”

They might also include a tally of the Red State Democrats’ statements on this as well, because as we have seen, on Second Amendment rights, everyone treads carefully, and, we hope, journalists covering gun issues with little experience or training on the weapons.

 

 

 

Puerto Rico’s Debt Wiped out? Not so Fast (Updated)

Puerto Rico’s Debt Wiped out? Not so Fast (Updated)

President Donald Trump’s comments Tuesday about Puerto Rico’s $72-billion debt being “wiped out” sent bond markets into a tizzy Wednesday, and, in the process, got the issue of the hurricane-ravaged island’s finances back into the discussion as it rebuilds.  (And reminded us former business journalists that psychology still drives market shifts, and bond markets are a jittery lot.)

The comments came during the President and First Lady’s tour of Puerto Rico Tuesday as the island slogs its way back to a sense of normalcy, one day at a time.

In an interview with Fox News Tuesday night, the president said:

“They owe a lot of money to your friends on Wall Street and we’re going to have to wipe that out. You’re going to say goodbye to that, I don’t know if it’s Goldman Sachs but whoever it is you can wave goodbye to that,” Trump said.

“The island’s general obligation bonds, which yield 8 percent, dropped to just 37 cents on the dollar,” during trading Wednesday, according to CNBC. “Just last month, the bonds were trading at around 56 cents to the dollar.”

But by the end of the day, the markets had settled down after the director of the Office of Management and Budget (OMB), Mick Mulvaney, had clarified the president’s comments.

“I think what you heard the president say is that Puerto Rico is going to have to figure out a way to solve its debt problem,” Mulvaney told NPR.

“Puerto Rico and its agencies owe more than $70 billion to creditors,” the WSJ reported Wednesday. “In May, Puerto Rico was placed under court protection in what amounted to the largest-ever U.S. municipal bankruptcy. A federal judge is presiding over the island’s debt restructuring under a bankruptcy-like legal framework approved by Congress last year, known as Promesa.

“Congress has appointed a federal oversight board to represent the island’s government. With the dispute now being heard in federal court, it’s not clear Trump would have the authority to intervene in the dispute, even if he wanted to.”

The President – FEMA, DHS and many cabinets of the executive branch – are facing unprecedented logistical challenges with Puerto Rico following three major hurricanes that damaged southeast Texas, Louisiana and Florida and the U.S. Virgin Islands before Maria hit Puerto Rico, which was already struggling to recover from Irma when Maria made landfall.

Now, the Trump Administration is reportedly preparing another appropriations request to shore up its emergency reserves to meet these and other challenges.

The AP Reports that “the Trump administration is finalizing a $29 billion disaster aid package that combines $16 billion to shore up the government-backed flood insurance program with almost $13 billion in new relief for hurricane victims, according to a senior administration official and top congressional aides.

“The request would address two pressing needs. The first is to pump money into the government-run flood insurance program, which is rapidly running out of cash to pay an influx of claims from victims of hurricanes Harvey, Irma, and Maria. At the same time, the Federal Emergency Management Agency continues to spend money for disaster relief operations at a high rate and requires more money.”

So while Puerto Rico struggles to rebuild, the U.S. government is running through its cash for emergencies at an alarming rate.  Puerto Rico’s long-term cost of rebuilding will remain an issue over how much the U.S. should contribute to the federal/local formula.

Right now, the federal government is fronting the cost 100 percent, which is only right and necessary, given the scale of the destruction that Puerto Rico faces.  The island and all the agencies are making progress getting its infrastructure back online and it’s heartening to see the spirit of the Puerto Rico rising to meet these challenges. The costs of getting it done, how much the U.S. should spend over the long-haul, and how Puerto Rico restructures its debt, are still moving targets.

 

A Day of Carnage in Las Vegas, and Selflessness

A Day of Carnage in Las Vegas, and Selflessness

[Updated to reflect casualties and injured] This story doesn’t easily slot into any topics that SL2R blog covers, but when the deadliest shooting in modern U.S. history happens in Las Vegas, which it did late Sunday during a country music festival, with 59 confirmed dead so far and about 527 injured, we must post.

Police have identified the gunman as Stephen Paddock, 64, who was reportedly shooting from the 32nd floor window of the Mandalay Bay hotel, just picking off victims at the Route 91 Harvest Festival, where some 22,000 concert goers had gathered to hear singer Jason Aldean’s performance. Police later found the gunman dead in his hotel room from a self-inflicted gunshot wound.

“Shocked concertgoers, some with blood on their clothing, wandered streets, where the flashing lights of the city’s gaudy casinos blended with those of emergency vehicles,” according to Reuters.

This was a day for the commander-in-chief to be a comforter-in-chief, and help the country make sense of the carnage.

“This was an act of pure evil,” President Donald Trump said in a statement Monday. “In moments of tragedy and horror, America comes together as one — and it always has. We call upon the bonds that unite us — our faith, our family, and our shared values. We call upon the bonds of citizenship, the ties of community, and the comfort of our common humanity.”

He ordered all federal flags lowered to half-staff Monday and is expected to visit Las Vegas to meet with victims, families and responders.

Gun control advocates and celebrities wasted no time politicizing the issue, calling for gun control measures, or issuing ridiculous “what if…he had a silencer” statements with the facts still rolling in.  This is tone-deaf timing.

Speaking of tone deaf and dumb, the DailyCaller reported that a “top legal executive at CBS, Hayley Geftman-Gold, said she “‘is not even sympathetic’ for the victims of the shooting at a country music festival at Mandalay Bay in Las Vegas Sunday night,” because, she said, country music fans usually are Republicans. She was reportedly fired.

In response to a reporter asking about whether the shooting would alter the president’s policy of supporting gun rights, White House Press Secretary Sarah Huckabee Sanders said today was not the day to engage in policy discussions about gun control.

Today was about helping the victims, their families and securing a crime scene while finding out what drove this depraved act.

“Shortly after announcing blood drives to help victims of a mass shooting that left at least 58 dead and more than 500 injured, hundreds of people in Las Vegas showed up to donate,” reported local TV station, Ch. 3 News. Local police said so many had showed up to donate that all the blood banks in the city had a six hour wait. More details on where to donate blood are here.

In an emotional statement lauding the selflessness of strangers who stepped in the way of harm to save other strangers’ lives during the shooting, this is what Huckabee Sanders highlighted: “What these people did for each other says far more about who we are as Americans than the cowardly acts of a killer ever could,” she said.

“The Gospel of John reminds us that there is no greater love than to lay down one’s life for a friend. The memory of those who displayed the ultimate expression of love in the midst of an unimaginable act of hate will never fade.

“Their examples will serve as an eternal reminder that the American spirit cannot and will not ever be broken. In the days ahead we will grieve as a nation, we will honor the memory of those lost as a nation, and we will come together united as one nation, under God and indivisible.”

Reuters reports that the gunman lived in a retirement community in Mesquite, Nevada and that police believe he acted alone. They do not know why he attacked the crowd. “The Islamic State militant group claimed responsibility for the massacre, but U.S. officials said there was no evidence of that.”

Las Vegas Police Department St. Randy Sutton, in an interview with Fox News, said the investigation of what happened will be monumental to understand what motivated “this madmen to act as he did. There will be no closure for the families until this is [figured out],” he said.

“Does this make it personal to me? You’re damn right it does. This is going to affect thousands of thousands of people in a deeply personal way. And it will affect all of America. This event is a time for unity. We must set aside the petty animosities, the politics, and stand up as one America.”

Soldiering on With Puerto Rico as it Struggles to Recover

Soldiering on With Puerto Rico as it Struggles to Recover

[UPDATED 10/1]

After documenting the scale of the infrastructure damage to Southeast Texas and Florida from hurricanes Harvey and Irma, respectively, as a way to keep up with the efforts to rebuild infrastructure, I’ve been compiling notes on the situation facing Puerto Rico as residents work through the day-to-day of coping with an island devastated by the two major hurricanes in a short time span.

Hurricane Maria’s damage to Puerto Rico is in another class altogether compared to Hurricane Harvey and Irma’s damage to the southeast U.S. region.

Puerto Rico’s unique problems — an island territory with no contiguous borders for supplies to traverse, crumbling infrastructure and a government in bankruptcy, have combined to make this challenge more acute for responders.

But soldier on they do, literally with soldiers, sailors, engineers and FEMA response teams spreading out to help the island territory get back on its feet.

Here’s my situation report on Puerto Rico so far:

Highlights:

  • Death toll at 16, more expected as rescue teams move inland (FEMA, news reports)
  • The region is expecting heavy rainfall and is under flash flood watch until Sunday evening, per the National Weather Service. (2-4 inches of rain expected) (Axios.com)
  • Governor’s website for updates to infrastructure: http://status.pr
  • President Trump and First Lady Melania to visit Puerto Rico Tuesday.
  • President Trump: “All American hearts are united with the people of Puerto Rico and the U.S. Virgin Islands who have faced terrible devastation in the wake of two catastrophic hurricanes. I know it’s been devastating. We’re sending people to help.”
  • “We are with you. We will stay with you and we will come back stronger than ever.”
  • Army Corps of Engineers Mission: Restoring power grid, rebuilding island’s infrastructure
  • Central interior of island reviewed (9/28)
  • Thousands of Puerto Ricans are expected to leave their homes on the island to come to the United States. 350,000 P.R. students to start school in Florida. (Miami Herald, Gov. Rick Scott)

Rescue and Recovery

Emergency Response:

Army Corps of Engineers Mission:  “to provide Puerto Rico with temporary power, temporary roofing, technical assistance for debris removal, and infrastructure assessment,” said Mobile District Commander, COL James DeLapp, who is the officer in charge of the Corps assets deployed in Puerto Rico.”

“One of the first missions the Recovery Field Office and other Corps assets have already taken on is assessing the damage to the Guajataca Dam, designed to reduce the impacts of flooding in and around Ponce, Puerto Rico. The Corps is also working to provide emergency power to critical sites, such as hospitals.”

Humanitarian Response

  • Over 10,000 federal officials are on the ground in Puerto Rico and the U.S. Virgin Islands working hand-in-hand with local families and officials and communities to provide assistance and comfort to those in need. (VP Pence; DHS advisor Bossert)
  • Military assets moving into place to oversee the rebuilding of the island’s infrastructure, already fragile before two major hurricanes slammed into the island.
  • More national guard heading (1,400) in P.R. to assist in generators already on site
  • 95-97 percent of Island still w/o electricity (news reports)
  • Gov. Rick Scott, back from a tour of the P.R. situation: “Let’s focus on important things: let’s make sure everybody’s safe; let’s make sure we work on getting power restored.”
  • US Military sent large generator to help capacity in San Juan Airport
  • Most generators on island in use to support hospitals
  • Hospital ship Comfort expected to arrive Monday or Tuesday
  • Half of territory without drinking water
  • Eight airports now open. one airport closed as of Friday.
  • Nvoad.gov – volunteering information
  • more than 4.5 million meals, 4.6 million liters of water delivered and many millions more are on the way (T.Bossert DHS 9/28).
  • VP Mike Pence in an interview Saturday with WKMG, “the Department of Defense [has] 16 different Navy ships in the region, the USS Comfort will be there in a matter of days. I was able to inform Governor Rosselló the USS Wasp will be arriving with 16 helicopters tomorrow. We have literally 10,000 federal officials on the ground, 4,500 National Guard have been there from early on, more are on the way.” (Article and video WKMG Orlando: http://bit.ly/2x3noGh)
  • Fuel and supplies continued to stack up in ports as President Trump waived the Jones Act proactively Thursday to ensure more supplies are not held up by maritime restrictions.
  • But the same issues remained: “There are plenty of ships and plenty of cargo to come into the island,” said Mark Miller, a spokesman for shipping company Crowley, which has 3,000 containers of supplies in the US territory. “From there, that’s where the supply chain breaks down — getting the goods from the port to the people on the island who need them,” he told Bloomberg News.”
  • 12 Coast Guard Cutters; 3 U.S. Navy Ships; 1 DoT Maritime ship; six commercial ships with supplies (T. Bossert briefing 9/28)
  • Seven additional ships on the way to house responders. As of Thursday, 9/28, FEMA and supporting agencies had delivered 1.3 million meals, 2.7 million liters of water (T.Bossert)
  • FEMA – 14 staging areas set up across the island territory for launching assistance programs. (TownHallNews 9/30)

Humanitarian crisis leads to migration:

(Miami Herald) “Following the disaster caused by Hurricane Maria in Puerto Rico — which triggered floods and mudslides and left the island of 3.5 million people without electricity or potable water — thousands of Puerto Ricans are expected to leave their homes on the island to come to the United States. That exodus will have a significant impact in Florida, one of the main destinations of Puerto Rican migration, which has increased every year over the past decade because of the economic recession on the island.

Between Sept. 21 and 28, a total of 18 flights loaded with passengers from San Juan arrived at Miami International Airport, with 2,700 people on board (including tourists), according to figures from the airport communications department.

“State and local authorities are also preparing for the potential wave of migration.

“Florida Gov. Rick Scott recently announced that the Sunshine State will assist the displaced. Scott asked public universities to allow Puerto Rican students to pay tuition at Florida residents’ prices.

“The Miami-Dade school system also expects to receive some of the 350,000 Puerto Rican students whose schools have not yet been able to open and it is not known when classes will resume.” (Full story in Miami Herald is here)

Response to Puerto Rico’s devastation, and political debate:

Politico: “Republicans fretted” over President Trump’s characteristically direct and blunt tweet in response to the San Juan mayor, a liberal anti-Trump voice, who accused the federal government of not doing enough to help.

Amid great suffering of the Puerto Rico residents as they struggle to regain the necessities of life and start their journey back to normalcy, speaking truth about Puerto Rico’s stewardship of its finances and infrastructure prior to the hurricane becomes more difficult, as though piling on more cruelty to what they have suffered already.

But an honest account of the situation is this: The island’s history of corruption and neglect of infrastructure have exacerbated the situation, in addition to the island locale that is difficult to get supplies through. Many P.R. residents are aware of this, which likely deepens their frustration and despair, leading to a lashing out at the very forces moving in to help.

Republican state Rep. Bob Cortes, a Puerto Rico native who lives in Central Florida, tells Politico….that “Puerto Rico deserves its share of the blame, thanks to the commonwealth’s endemic corruption and mismanagement. ‘It took a storm of this magnitude to show how under-prepared they were,'” Cortes said.

In an op-ed in the New York Post, Jorge Rodriguez, 49, the CEO of PACIV, an international engineering firm based in Puerto Rico, takes note that the island’s government was ill-prepared for the magnitude of the crisis:

“The governor Ricardo Rossello has little experience. He’s 36 and never really held a job and never dealt with a budget.

“For instance, shortly after the hurricane hit, the government imposed a curfew from 6 pm to 6 am and then changed it. Now, it’s 7 pm to 5 am, and makes no sense. The curfew has prevented fuel trucks from transporting their loads. These trucks should have been allowed to run for 24 hours to address our needs, but they have been stalled, and so we have massive lines at gas stations and severe shortages of diesel at our hospitals and supermarkets.”

The response to Puerto Rico’s destruction comes as rebuilding in hurricane-ravaged Southeast Texas and Florida has tested the resources of the United States government. And yet, it has marshalled a major response to assist in what is essentially a total rebuild of the island territory’s infrastructure. But no matter how massive, the facts on the ground are that with so much infrastructure covered in debris, washed out and toppled, this recovery will be slower than what we saw in Texas and Florida.

The New York Times sent in a team of reporters to collect anecdotes that throw the suffering into high relief:

“Puerto Rico has not been forgotten, but more than a week after Hurricane Maria hit, it’s a woozy empire of wreckage; of waiting in line for food, water and gas and then finding another line to wait in some more.

“Ever since Hurricane Maria flooded the first floor of his house in Ocean Park, [Joey] Ramos has been boxed in the second floor of his home, hunkered down with his wife and his four pitbull-mastiff mix dogs, which guard his house.

“The waters stink of excrement. He’s seen fish swim by his stoop. To exit his home he often paddles an abandoned refrigerator like a gondola.” (full story: http://nyti.ms/2fZv1mp)

“In front of the pink and green, art deco facade of the Telégrafo building in Santurce, dozens of people checked their phones. The section of the street is one of the few spots on the island where residents can connect to free Wi-Fi.

“People try to reach family members abroad or those left isolated in island towns. Many check their emails for any word from their employer. It’s common to see people break down after making contact with a loved one for the first time since the hurricane.” (A Day in the Life of Puerto Rico)

The President and First Lady’s visit on Tuesday would be a much-needed presence and comfort to the island’s residents amid the massive response the U.S. government is undertaking to the scale of devastation, which is heartbreaking to comprehend as the destruction becomes more clear each day.

Puerto Ricans are now facing the same kind of loss – and grief over their losses – that has hit greater Houston, parts of Louisiana and Florida.

But once again, we are reminded that, at a time of infrastructure devastation across southeast Texas, parts of Florida and now, Puerto Rico and the U.S. Virgin Islands, not only do we have a former construction executive and builder as President, he is a New Yorker who knows how to build against many obstacles and difficulties.

New Yorkers know how to build.

Puerto Rico will have to endure months and years of rebuilding. But as they soldier through, they will also have a shared experience of rebuilding as other parts of the U.S.  still reeling from major hurricane damage.

Americans all in spirit, working through their tasks together and soldiering on.

(Updated to clarify hurricanes’ magnitude that struck Puerto Rico and U.S. Virgin Islands.)

After Mexico City’s 7.1 Quake, Delayed Collapses

After Mexico City’s 7.1 Quake, Delayed Collapses

A week after Mexico City’s magnitude 7.1 earthquake, with the heartbreaking search and rescue for children in a school whose roof pancaked, and over 326 people dead from the quake, the ripples from the hit in the earthquake-prone region are not over.

The questions now in front of city officials is whether Mexico’s aggressive building codes are only good on paper or if the buddy-buddy system of approvals — which plagues building inspections around the globe — had inspectors looking the other way on granting certificates of occupancy.

New investigations are under way, according to the New York Times, over whether the school that collapsed may have violated construction codes;  19 children and six adults died in the aftermath of the roof collapse.

“Outside inspectors had signed off on the school building’s safety as recently as three months ago, but the inquiry will look for “hidden defects,” Claudia Sheinbaum, the delegate in charge of the Tlalpan district, said Monday.”

The New York Times notes that other investigations are unfolding after the “collapse at the private Enrique Rébsamen school quickly became the most riveting emblem of the loss caused by the Sept. 19 earthquake, which has killed at least 326 people — 187 of them in Mexico City.

The AP is also following the problems in Mexico City’s building standards, post quake. “The risk of delayed collapse is real: The cupola of Our Lady of Angels Church, damaged and cracked by the Sept. 19 quake, split in half and crashed to the ground Sunday evening. There were no injuries.

“Nervous neighbors continued calling police Monday as apparently new cracks appeared in their apartment buildings or existing ones worsened, even as the city struggled to get back to normality.

“Education Secretary Aurelio Nuno said Monday that officials had cleared only 676 of Mexico City’s nearly 9,000 schools to reopen Tuesday and said it could be two to three weeks before all are declared safe, leaving hundreds of thousands of children idle.”

But despite 30 years of upgrades to the city’s building codes, Mexico City has to grapple with the inbred nature of building code enforcement which will be pushed to the fore when more buildings collapse after the quake, the New York Times notes:

“Although the new codes now rank among the world’s best, their enforcement is deeply flawed and uneven, according to interviews with scholars, officials and building inspectors.

“Building inspections have essentially been outsourced to a network of private engineers who are hired and paid for by the developers, creating conflicts of interest that can undermine even the best standards.”

 

Puerto Rico: ‘Irma Gave Us a Break, Maria Destroyed Us’

Puerto Rico: ‘Irma Gave Us a Break, Maria Destroyed Us’

[UPDATED SEPT. 22] Puerto Rico is an island  without electricity today after Hurricane Maria pummeled the U.S. territory on Wednesday when the Category 4 storm made landfall. The devastation is massive. The U.S. Virgin Islands also sustained damage from just a glancing blow as Hurricane Maria swept in.

The scale of destruction is only starting to reveal itself. Now comes word that damage to the Guajataca Dam may mean some  70,000 residents who live nearby have to evacuate.

The New York Times has been covering the storm and aftermath with an eloquence that captures the scale of the destruction and what the residents are facing:

The town of Boa Baja was still sorting through the chaos on Friday morning.

Muddy waters still isolated entire neighborhoods. Flooded houses smelled of mud, food and excrement. The town government was just beginning to account for people and supplies in shelters. Volunteers and government rescuers continued to rescue stranded residents on boats and trucks. Dead horses were found scattered in the streets, eyes bulging and bodies bloated by the waters.

The chief executive of the government-owned Puerto Rico Electric Power Authority, Ricardo Ramos, has reportedly said the electrical grid to the island has been destroyed. Puerto Rico’s infrastructure was in tough shape before the hurricane hit. The New York Times describes the situation:

Puerto Rico faces numerous obstacles as it begins to emerge from the storm: the weight of an extended debt and bankruptcy crisis; a recovery process begun after Irma, which killed at least three people and left nearly 70 percent of households without power; the difficulty of getting to an island far from the mainland; and the strain on relief efforts by the Federal Emergency Management Agency and other groups already spread thin in the wake of several recent storms.

“Irma gave us a break, but Maria destroyed us,” Edwin Serrano, a construction worker in Old San Juan, said.

The storm churned off the northern coast of the Dominican Republic as a Category 3 storm on Thursday, and the National Hurricane Center repeated hurricane warnings for late Thursday and early Friday morning for the southeastern Bahamas and the Turks and Caicos.

Puerto Rico was already under water in debt before the storm hit. It owes $74 billion to bondholders, and was toiling with $50 billion in unfunded pensions before Maria made landfall.

I’ve been cataloging the recent hurricanes that hit southeast Texas and Texas with situation report/memos that help track  damage to infrastructure in the regions. I’m now adding Puerto Rico to the list:

  • Made landfall in Puerto Rico early Wednesday as cat 4 Hurricane with 155 mph sustained winds.
  • Hurricane Maria has cut power to the entire island of Puerto Rico as the death toll rises to at least 9 (NYP http://st/2xQG0JB), 3.5 million across Island w/o power
  • Weeks or months before power fully restored; Curfew imposed (officials, multiple news source)
  • Maria crossed the United States Virgin Islands as a Category 5 storm, then weakened slightly but remained “extremely dangerous.” (NYT)
  • Tornadoes were (still) possible over Puerto Rico and the Virgin Islands as storm weakened, and Maria was expected to remain a dangerous hurricane through Friday. (NYT)
  • 11,000 in shelters across Puerto Rico (more expected) (NYT, numerous reports)
  • FEMA’s Brock Long: Island is still under flash flood warnings. Assets in place to move in when storm passes. Goals: life safety; life sustaining and rescue teams when storm passes;
  • Power crews on foot to begin work of restoring with roads blocked, flooding;
  • San Juan Mayor Carmen Yulín Cruz: We’re looking at four to six months without electricity. (MSNBC via NYP)
  • Territory asking for disaster declaration (multiple news sources)

Dominica’s 72,000 residents hit with maximum sustained winds of nearly 160 miles per hour (NYT); seven 7 reported deaths in Dominica from the storm (multiple

Critical Infrastructure updates:

  1. Electricity, Gas:
  • (NYT) Electricity was knocked out on the whole island, a spokeswoman for the Puerto Rico State Agency for Emergency and Disaster Management said. The authorities warned weary residents not to let down their guard, because flash flooding and mudslides could be more deadly than the initial winds. (NYT)
  • We’re looking at four to six months without electricity,” San Juan Mayor Carmen Yulín Cruz told MSNBC. (via NYP)
  • Crews on foot to start restoration while roads blocked, flooded (numerous reports).
  • Cell phone providers rely on electricity to deliver service; not a lot of Uninterruptible Power Supply (UPS) present;
  • FEMA’s Long: Looking to provide/restore emergency power to get P.R. back to routine to start rebuilding and recovery.

2. Roadways, waterways: Just getting started on roadways as winds die down; Island is shut down after sustaining major damage from Maria.

3. Hospitals: Damage to critical infra; hospitals – working to alleviate (FEMA’s Long)

4. Airports: Island w/o electricity

5. Schools: island w/o electricity

 

 Damage, Response, Rescue, pre-Recovery

  1. NYT: Hurricane Maria reached Puerto Rico as a powerful Category 4 storm early Wednesday. Hours before, it had crossed the United States Virgin Islands as a Category 5 storm, and tore roofs off houses on the Caribbean island of Dominica. 
  1. Puerto Rico, Caribbean: Have not experienced event of this magnitude in their history;
  2. Phones: landlines also cut (Officials)
  3. NHC – life threatening wind, rain, surge: up to 9 feet expected; dangerous waves Wed. eve
  4. widespread flooding
  5. Dominica: Prime Minister rescued from his home; few homes w/out damage: (NYT)
  6. (FNC) FEMA Administrator Brock Long: 3200 staff on Virgin Island and PR. Looking to deploy out as storm passes through.
  7. Looking to get airports open airports and shipping ports going as soon as possible after storm;
  8. Is FEMA Stretched thin? Long: We’re dedicated, running for 30 days; will continue to meet the demands; dedicated to helping people; we’re good to go;
  9. Want to help? Nvoad.org – Will publicize other ways to support territories in coming weeks;
  10. San Juan metro residents don’t expect power back for months
  11. Jenniffer González, Puerto Rico’s Representative in Congress: Going to take a long time to restore infrastructure to the islands.

No resident escaped the impact, with roofs blown off homes, and residents literally cooking meals in the streets, while water supplies trickle.

As of Friday, supplies were coming in and the National Guard was on the island.

 

Before and After Irma

Before and After Irma

Amazing doesn’t quite sum up the sheer power of Hurricane Irma, as the world watches the former Category 5 hurricane continue wreaking its destruction in the southeast after slamming into Florida twice as a Category 4 hurricane Sunday.

To sum it up, via CBSNews.com:

The monster hurricane that hit the Florida Keys on Sunday as a Category 4 storm was downgraded to tropical storm status as it finally pushed its way out of the state and into Georgia, where it caused more misery. The National Hurricane Center (NHC) said early Tuesday that Irma had become a post-tropical cyclone and was expected to move northwest through the southeastern U.S. toward the Tennessee Valley, weakening as it goes.

These images do little justice to the scale of this storm and the destruction that it left behind before moving on to Alabama, Georgia and South Carolina, seemingly at once due to its 400-mile span. But thought I’d post a few for the history we are watching unfold, while reports from friends and family in Florida start to roll out. We’re just getting started in the infrastructure rebuild that this will spark in the Sunshine State.

IrmaFromSpace.Web

IrmaFromSpace.Web

Miami before and after Irma (Instagram)

Miami before and after Irma (Instagram)

 

Miami Before and After Irma

Miami Before and After Irma

 

 

 

Irma’s Scale and Fury Heads for Florida

Irma’s Scale and Fury Heads for Florida

After watching Hurricane Harvey’s devastation in southeast Texas last week, we thought we’d seen a storm to top all storms for years to come. The initial damage estimates from Harvey’s hit on greater Houston and parts of Louisiana are as high as $180 billion and could out do Katrina’s damage tab.

We were wrong. Hurricane Irma, category 5, 175 mph winds, is breaking all records as it barrels to Florida and the southeast, after leaving devastation behind it in the Caribbean. Right on its heels, Hurricane Jose, also picking up power.

This could be catastrophic for the southeast of the U.S.

 

New Lane Debut for Tappan Zee, New Toll-Hike Chatter

New Lane Debut for Tappan Zee, New Toll-Hike Chatter

The Tappan Zee bridge project in New York’s Westchester County is scheduled to open its westbound lane to traffic on Friday, Aug. 25th, according to the New York Thruway, the authority overseeing the project. And they’re going to name the new bridge after New York Gov. Andrew Cuomo’s father.

It’s a stunning project to behold and a big milestone. At $4 billion, it’s a big price tag with roughly $400 million still unfunded, give or take.

The AP’s update on the project Monday tallies that the state has dedicated $2 billion from bank settlements and $1.6 billion from a federal loan to fund the project, according to Cuomo’s office.

One span of the future Gov. Mario M. Cuomo Bridge will open to westbound traffic Friday, signaling near-completion of a project to replace the 62-year-old Tappan Zee that has served as the poster child for America’s crumbling infrastructure. The second span is scheduled for completion in the spring.

The 3-mile-long bridge linking Westchester County to the New York State Thruway across the widest point in the Hudson is one of the largest public infrastructure projects underway in the U.S. and a model of the latest engineering. It will take more than 50 million vehicles a year across the river, from Manhattan commuters to truckers looking to skirt the traffic-choked city 25 miles to the south.

Greg Biryla, executive director of Unshackle Upstate, a coalition of business and trade organizations, tells the AP he is hearing  “whispers about raising tolls across the Thruway system to pay for a Bridge many upstate commuters will never use.”

Right now, the toll is $5 ($4.75 for EZ Pass holders).

ABC News affiliate WTEN quoted Empire Center for Public Policy E.J. McMahon August 2nd:

Never have we seen a project “approaching this scale for which there was no financial plan before it was built.”

The Governer’s office is pushing back on the chatter, telling the AP:

“There has been no upstate toll revenue used to support the construction and financing of the new bridge, and no upstate toll revenue will be necessary to cover any remaining costs as the Tappan Zee currently provides significant funding for the entire Thruway system,” said [Abbey Fashouer, a spokeswoman for Cuomo].

But the Democratic governor said last month that tolls from the entire 570-mile Thruway system will help pay the bridge bills. He has also pledged that Thruway tolls will be frozen through 2020.

After that, it’s anybody’s guess, but a pretty good one that they will go up, if the hints from Bill Finch, executive director of the NYThruway, are any indication:

“Obviously like anything else in society, the cost of producing this is going up. Health care is stable but it’s not going down. Gasoline is not going down. All the things that the Thruway buys and pays for, which is labor and steel and concrete and asphalt are probably not going down. They are going to go up…

A ‘New York’ Tower in San Francisco? Not Skinny Enough.

A ‘New York’ Tower in San Francisco? Not Skinny Enough.

At 61 stories high, the Salesforce Tower in San Francisco now dominates the city’s skyline. And not all San Franciscans are happy about it.

One local architecture critic calls it a building that belongs in New York or even Chicago. It wasn’t a compliment. But it should be. New York could show us a few things about the state of building tall. And it’s skinnier than ever.

The AP reports, via the Press Democrat, that the “$1.1 billion skyscraper has already changed [San Francisco’s] iconic skyline, towering over old favorites like Coit Tower and the Transamerica Pyramid. Unlike in New York and Chicago, the new 1,070-foot (326-meter) high-rise is a gargantuan presence in this liberal West Coast city.”

That’s pretty tall, even by the standards of New York’s building heights. Don’t worry, San Francisco, you’re in no danger of catching up with New York’s ever-changing skyline, which keeps plowing upward with Hudson Yards development, the 28-acre project that is considered the largest office park project in the country and the biggest in New York since the Rockefeller Center.

Lets put the Salesforce tower into context with New York’s obsession with height. If it was a New York building, its 1,070 feet would rank as its sixth-tallest, just ahead of the Chrysler Building at 1,050 feet and right behind Three World Trade Center, which tops out at 1,079 feet, according to a Wikipedia page of the tallest buildings in New York City.

It will soon have more competition in the height department with the 30 Hudson Yards building, which is slated to top out at 1,296 feet by its completion in 2019. Plenty of other buildings will be flirting with its height as one of many high-rises planned in the 18-million sq. ft development.

That would put it in just behind the tallest building, One World Trade, which, at 1,776 feet high, is a very patriotic height, and second-tallest, the residential building 432 Park Avenue at 1,398 feet, followed by the Empire State building at 1,250 feet, the Bank of America Tower at 1,200 feet.

New York is not only building taller than ever. The big trend in the skyline is super slender buildings. The skyscraper museum’s website breaks down the ratios of height to width that define these skinny buildings.

This excellent video from WSP engineering features many building experts, including Carol Willis, explaining the higher and slender features of many luxury residential buildings, which features 432 Park Avenue, the second-tallest building in the city.  (It also features a comment from Gary Pomerantz, an MEP engineer I worked with briefly years ago at Flack + Kurtz. Shout out to Gary!)

And although we don’t endorse the Lincoln welder machines featured in this video, we think the images provide a unique view of the conditions that construction workers toil in, which, no matter what style of building, is the common feature between the Salesforce tower addition to San Francisco and the New York skyline: the workers who get it done.

Foxconn’s Wisconsin Plans = 10,000 Construction Jobs

Foxconn’s Wisconsin Plans = 10,000 Construction Jobs

Electronics giant Foxconn Technology Group, a major product supplier to Apple, Microsoft and Intel, made news this week when it announced a $10 billion expansion of its operations in southeastern Wisconsin to make flat-panel (LCD) displays and other products.

The six-year project should create some 10,000 construction jobs, Foxconn said, 3,000 permanent jobs when the plant opens and estimates ranging from 10,000 to 22,000 jobs that support the facility, depending on how you add up secondary markets and economic multipliers when it goes online.

Contractors will be doing very well in this region, long after that plant goes live. OK, that’s an easy prediction.

The Taiwanese company’s upcoming facility in the American Midwest is expected to employ at least 3,000 people and potentially increase to 13,000 total jobs, a win for President Donald Trump’s agenda to return manufacturing jobs to the US, Endgadget.com reported.

Quartz.com may be having some fun when it reports that Wisconsin Governor Scott Walker hosted an event for business leaders at which he and Foxconn founder and chairman Terry Gou signed a memorandum of understanding about the plan.

“On the badges of each attendee were written in big block letters the words that have become the governor’s defacto slogan for the project: “Welcome to Wisconn Valley.”

Well…..let’s not get too carried away.

After all, the facts of the deal alone are positive on their face. Now, it’s up to the state’s legislature to approve a $3 billion incentive package after Gov. Walker called a special session Friday. The package reportedly includes state income tax credits and a $150 million sales tax “holiday.”

The Chicago Tribune, meanwhile, notes that the deal could create problems for its next-door neighbor after “Wisconsin — a Republican-led swing state that voted for President Donald Trump — beat out Illinois and other contenders for the $10 billion investment.”

[If] the project moves forward as planned, it will create unprecedented challenges for Wisconsin’s infrastructure, workforce, education, housing and culture in a relatively tranquil part of the state.

We’re betting that those are the kind of problems Wisconsin would be happy to face and address as its economy grows with this facility. As for Chicago’s home state, its business climate won’t be helped by this, the Trib continues:

Illinois will face its own challenges, as companies here try to get their foot in the door of a potential customer across the border. Meanwhile, the state, which has scored victories with corporate relocations and thousands of warehouse jobs from high-fliers such as Amazon, currently has no major job incentive program it can use to woo a large employer like Foxconn.

The state’s population growth trails that of some southern and western states, but the plant and suppliers it could attract would not only reel in out-of-state workers, but also help Wisconsin retain the technical and engineering talent it’s been exporting, said Jim Paetsch, a vice president atMilwaukee 7, a regional economic development group.

“Our universities are graduating more people than our companies need … and they go elsewhere,” Paetsch said. “We will be able to draw people to Wisconsin on a scale that we haven’t been able to in the past.”

The article finally gets around to the big reason that Illinois lost out: its financial woes, including a credit rating that has sunk to junk status, a $15-billion hole in its budget and state employee pension funds that are woefully underfunded, to put the issue mildly.

As Peterson told the Trib: Companies don’t like uncertainty, and want to know there’s not some time bomb down the road.” Illinois is the canary in the coal mine for states facing major shortfalls in how they will pay for promises, especially pensions.

Meanwhile, Gov. Walker has said the jobs created at the Foxconn factory would pay an average salary of $53,875 plus benefits and has posted many updates on his Facebook page.

It’s a step forward for what many are calling “a new kind of digital manufacturing” as consultancy McKinsey calls it, or simply 21st Century manufacturing in the U.S. and it will mean a huge boost to construction productivity and contractor work for years to come in the region.

Can we say it? It’s a win for the region.

 

 

 

Construction Outlook ’17: ‘Still Has Legs’ but Uncertainty Creeps In

Construction Outlook ’17: ‘Still Has Legs’ but Uncertainty Creeps In

The U.S. construction industry’s current expansion “still has legs” and is looking at 3% overall growth in 2017 — and 5% if you take out the more volatile sectors, says Dodge Data & Analytics chief economist Robert Murray.

But a “slight tempering” has crept into the construction data firm’s research, which is another way of saying uncertainty coming out of Washington, D.C. has found its way into its forecasts for the rest of the year. For example, public works spending is hovering around 2% growth expectations, not quite the bump the data folks were expecting to see added to the pipeline.

During a mid-year outlook conference call for 2017 today, Murray noted that the total construction market in the U.S. would hit about $7.3 trillion worth of activity in 2017, up 3% overall from 2016.

Electric utilities & gas plant building is down 30% year-over-year due to a flurry of new Liquified Natural Gas (LNG) plant construction in the past few years and an oversupply of natural gas that is driving down prices. After *two straight years of declines, manufacturing is expected to grow by 2% in 2017, but “exclude those two volatile project types and it’s still a robust overall picture,” Murray says.

Dodge Data & Analytics slide shows overall growth in construction for 2017.

The Healthcare facilities sector is also showing uncertainty over the failure by Congress so far to enact legislation on the repeal and replace plans for Obamacare, which impacts facilities planning, as well as what’s going on with Medicaid reimbursement that drives some facility building decisions.

Murray sees the recovery from the Great Recession of 2008 and expansion “proceeding, but rates of growth are decelerating.”

Other takeaways:

  • Other public works sub-sectors — pipelines, airport runways and major rail projects are driving strong increases.
  • A surge in pipeline related construction — even before the Trump Administration eased approvals with recent executive orders, is also driving growth in the Public Works sector to a 2% growth target in 2017. The executive orders to approve pipeline construction is having a positive effect on the growth numbers.
  • So while Liquified Natural Gas (LNG) terminal construction is way down after a flurry of new plant construction, the natural gas boom is still on with pipeline construction.
  • Airport terminal projects are also standout categories, providing an overall lift to construction activity in 2017.
  • Housing is always the bellwether sector for the overall building market and the single-family housing sector is among the strongest construction sector at 12% growth expected over 2016.
  • Millennials in their 30’s (the ones not too burdened by student debt or still living in their parent’s basements with low-paying jobs), are seen as warming to the idea of their first home in the suburbs, perhaps ready to let go of that cool apartment rental in a downtown hipster neighborhood.

Looking ahead to 2018, Murray sees another year of growth but is still “tempering” a bit because of the uncertainty factor of what Congress can accomplish. “If tax reform passes we could see something on the order of 4% – 5% growth, and maybe more of a response from the educational sector, especially colleges and universities with endowments tied to the performance of the stock market.”

If Congress passes a tax package, he and his team expect to update the working estimate of 2.3% GDP growth.

The latest news is that the Treasury Department is looking at a corporate tax rate cut from 35% to now the 20% range (instead of the 15% initially called for). Axios.com is reporting that anything below 25% will be difficult, according to its GOP sources. One of the more contentious elements of any tax reform or package will be how elimination of many deductions will hit state and local taxes.

Overall Murray adds, “businesses are doing well but remain cautious with investments.” Job growth is still relatively healthy at 180,000 a month in 2017.

By 2019, expect a slower economy and higher interest rates but for 2018 we should see the recovery of the construction industry since the Great Recession continue.

But pegging growth rates for 2018 depends on what Congress can get done on tax reform or cuts before the end of the year. On that forecast, he’s giving us the accountant’s answer: It depends.

 

*Updated to correct that manufacturing construction sector was down two prior years before positive growth rate of 2% in 2017.

Too Late for Newspapers vs. the Google/Facebook Duopoly?

Too Late for Newspapers vs. the Google/Facebook Duopoly?

[Updated 7/11/17]: A 2,000-member newspaper alliance is asking Congress for a pass on antitrust laws so it can engage in a kind of collusion to counter the dominance of the Google News/Facebook platform duopoly.

The newspapers’ ask is thus:

“The objective is to permit publishers to have concrete discussions with the two dominant distributors of online news content, Google and Facebook, on business model solutions to secure the long-term availability of local journalism produced by America’s newsrooms,” according to the the News Media Alliance’s announcement today.
The group represents about 2,000 newspapers in the U.S. and Canada and wants Congress to allow publishers to negotiate collectively with dominant online platforms.

It’s an interesting idea. Google News and Facebook are dominant in news distribution. They make and break a lot of traffic for these content creators. But the tyranny of the clicks that these platforms create and deliver — or don’t — isn’t a recent phenomenon.

My question: Is the move too late for the newspapers?

Fifteen years ago, Craigslist was already hollowing out their core classified business, one by one. That was the beginning of the end for many community newspapers, whose switch to digital publishing as their main focus over print came too late, and was too fragmented to create a concerted industry counterweight to the Googleplex.

Or better yet, where was the association’s investment in a competing platform such as a news hub of their own? Heck, they might have been able to team up with a Microsoft on a digital news hub and create their own reach and aggregation engine to counter Google News, or get ahead of the problem sooner by teaming with tech partners on distribution hubs. After all, MSFT did team up with NBC to create MSNBC back in the day, which was about Content Being King or something like that.

Newspapers and publishers did try this a few years back but their market timing was way off.

David Chavern, president and chief executive of the News Media Alliance, published an op-ed in the Wall Street Journal Monday to amplify the economics and technology driving the issue for the newspapers:

The problem is that today’s internet distribution systems distort the flow of economic value derived from good reporting. Google and Facebook dominate web traffic and online ad income. Together, they account for more than 70% of the $73 billion spent each year on digital advertising, and they eat up most of the growth. Nearly 80% of all online referral traffic comes from Google and Facebook. This is an immensely profitable business. The net income of Google’s parent company, Alphabet, was $19 billion last year. Facebook’s was $10 billion.

The remedy is to address this threat by banding together to create a greater network effect, in essence, and push for “stronger intellectual-property protections, better support for subscription models and a fair share of revenue and data.”

The big problem for the newspaper publishers is that Google and Facebook are having a good run at monetizing the content that the newspapers create when they pipe it into their platforms.

It’s a raw deal for the newspapers, and, more important, the communities they are struggling to serve as the decline of print wends its way through their balance sheets.

This is a sad and scary development for a healthy democratic society that needs local government watchdogs. Many journalists and media people lay the problem at the (clay) feet of too many newspaper publishers who didn’t act soon enough as an industry. A few early adopters here and there just weren’t enough to create the market heft they are trying to create now by banding together against the Google-Facebook-plex.

Chavern continues his points about Google and Facebook: They don’t employ reporters.  “They don’t dig through public records to uncover corruption, send correspondents into war zones, or attend last night’s game to get the highlights. They expect an economically squeezed news industry to do that costly work for them.”

It’s hard not to sympathize. News gathering is one of the most labor-intensive activities left in a world shifting to automation any way it can; news is not immune. Computers and bots now read the news and artificial intelligence can actually write the stories we humans think only our brains can tap out.

But I still think it will be a little longer before we’re all munching on McNews gathered and written by a robot, if only for sheer cultural-human reasons over economic ones. In my view, after we pay a robot for our sandwich and coffee at Starbucks, humans will crave a connection with other humans — which will mean we are even more byline-aware as we dine on a meal prepared and served by a bunch of electrons. No soul in that new machine.

Anyway. Forbes is one of a quite a few publications that waxed skeptical of the Alliance’s chances. For its money, Forbes argues that the newspapers’ own monopoly power in their respective markets brought this on.

One big development for the alliance to follow is whether Google’s $2.7-billion antitrust fine from the European Union could help their cause. Might this influence U.S. regulators to take a look at Google’s practices?

Reuters has reported that Google’s parent company Alphabet has “hired several top law firms in the EU to appeal a landmark $2.7B antitrust shopping results fine and to fight a potential second fine related to the Android operating system.”

The people at Seeking Alpha also note that:

EU authorities might also throw a third fine at Google regarding its Adsense for Search platform.

Intel has appealed a similar fine with a decision expected next year.

We’ll see if the newspapers can come up with a way to counter and get a piece of the GoogBook domination of news distribution — or if another idea will deliver their salvation in the age of social media conversations with content.

 

A Spectacular Speech in Poland on Western Values

A Spectacular Speech in Poland on Western Values

Taking in President Donald Trump’s speech in Poland on Thursday, I was reminded of my early childhood years in Germany where my father, a military pilot, was stationed during the height of the Cold War (back when it was West Germany).

In 1968, amid the so-called Prague Spring movement for more democratic reforms in Czechoslovakia, which threatened the Soviet Union’s communist rule of the country, some 200,000 Soviet bloc troops marched in and crushed the movement “in the largest deployment of military force in Europe since the end of World War II,” as the History channel notes.

Poland had seen that kind of aggression in 1939, before it came under Soviet domination after World War II:

“During the German occupation, nearly three million Polish Jews were killed in the Nazi death camps. The Nazis also severely persecuted the Slavic majority, deporting and executing Poles in an attempt to destroy the intelligentsia and Polish culture. A large Polish resistance movement effectively fought against the occupation with the assistance of the Polish government-in-exile. Many exiled Poles also fought for the Allied cause. The Soviets completed the liberation of Poland in 1945 and established a communist government in the nation.”

As young as I was in 1968, I remember well the chill that blew through Europe after the tanks rolled into Czechoslovakia. It went beyond the alarm that American military kids throughout the region were feeling as their parents shifted to higher alert.

Local shopkeepers who had grumbled over Americans in their stores, or rolled their eyes over the Americans’ fractured attempts at German, suddenly shifted their tone. They knew, and we understood at the time, that America would defend their values of Western civilization, which began with freedom and self-determination. It had just been snuffed out in the Czech Republic.

The experience has stayed with me throughout the years, just as it has with other family members who experienced brushes with East German troops during events such as Boy Scout troop visits to the Berlin Wall.

So to hear and then read the president’s speech in Poland, prior to the G-20 summit and the much-ballyhooed meeting with Vladimir Putin, that the “the defense of the West ultimately rests not only on means but also on the will of its people to prevail and be successful,” is to hear a defense of the West that we have not heard in many years.

It was a speech that touched on history, but connected to the threats we now face, while asking:

“The fundamental question of our time is whether the West has the will to survive. Do we have the confidence in our values to defend them at any cost? Do we have enough respect for our citizens to protect our borders? Do we have the desire and the courage to preserve our civilization in the face of those who would subvert and destroy it?”

“We can have the largest economies and the most lethal weapons anywhere on Earth, but if we do not have strong families and strong values, then we will be weak and we will not survive. If anyone forgets the critical importance of these things, let them come to one country that never has. Let them come to Poland.”

“Those heroes remind us that the West was saved with the blood of patriots; that each generation must rise up and play their part in its defense and that every foot of ground, and every last inch of civilization, is worth defending with your life.

“Our own fight for the West does not begin on the battlefield — it begins with our minds, our wills, and our souls. Today, the ties that unite our civilization are no less vital, and demand no less defense, than that bare shred of land on which the hope of Poland once totally rested. Our freedom, our civilization, and our survival depend on these bonds of history, culture, and memory.

The Wall Street Journal called it a very important speech that went beyond the “America First” doctrine from his Inaugural address. In “Trump’s Defining Speech,” the WSJ editorial noted:

Six months into his first term of office, Mr. Trump finally offered the core of what could become a governing philosophy. It is a determined and affirmative defense of the Western tradition.

To be sure, Mr. Trump’s speech also contained several pointed and welcome foreign-policy statements. He assured Poland it would not be held hostage to a single supplier of energy, meaning Russia. He exhorted Russia to stop destabilizing Ukraine “and elsewhere,” to stop supporting Syria and Iran and “instead join the community of responsible nations.” He explicitly committed to NATO’s Article 5 on mutual defense.

It is a nationalism rooted in values and beliefs—the rule of law, freedom of expression, religious faith and freedom from oppressive government—that let Europe and then America rise to prominence. This, Mr. Trump is saying, is worth whatever it takes to preserve and protect.

It was an important and, we hope, a defining speech—for the Trump Presidency and for Donald Trump himself.

As we headed back to the states a few years after the 1968 uprising, we always remembered the uniqueness of America and its fidelity to values in the Western tradition: freedom of speech, of association, of religion, to name a few.

In the speech, we heard a defense of the values we learned and understood as Americans abroad:

“And today as ever, Poland is in our heart, and its people are in that fight. Just as Poland could not be broken, I declare today for the world to hear that the West will never, ever be broken. Our values will prevail. Our people will thrive. And our civilization will triumph.

“So, together, let us all fight like the Poles — for family, for freedom, for country, and for God.”

My Polish friends will be talking about this speech for some time. We will be thinking about it ourselves for quite some time.

 

iPhone 10 Years After: Jobs Loved to Change the World

iPhone 10 Years After: Jobs Loved to Change the World

Of all the retrospectives in the tech press this week about the iPhone’s decade of cultural impact 10 years after its launch on June 29, and the backstory of how they got to launch,  the WSJ’s video of three former Apple executives stands out for me.

The pivotal moments the three Apple executives describe in their stories of the development of the touch-screen format and other iPhone features puts you in the vibe of the times — no way back machine necessary.

Some highlights and quotes from the video (link takes you to the WSJ video page):

Scott Forstall, former Apple senior vice president, iPhone iOS:

We were sitting in a conference room with Steve Jobs. “We looked around and noticed that almost everyone around us had [cell] phones and everyone was complaining about their phones. And we thought, could we build something better?”

Tony Fadell, former Apple senior vice president, iPod division:

We were making the iPod phone [At the time, the iPod was about 50 percent of Apple’s sales]. We tried 30-40 different ways of making the [navigation] wheel not become an old rotary phone dial. Nothing seemed logical or intuitive. You could select from a list, but then to actually dial a real number, it was so cumbersome, this was never gonna work.

Forstall: One day during lunch, Steve said to me, ‘you know that technology we’re building to do touch for the tablet, could we shrink that down into the size of something that could fit into your pocket, and make a phone out of that technology?

Fadell: Steve said to me, ‘come here, I want to show you something.’ He brought us in a room and in it was a ping pong table-sized demo table, projecting a Mac interface. And he was like, ‘check this out’…it was like a big Mac with a multi-touch display. Steve said,  ‘I think this is going to solve our problem.’

Forstall: Steve came to the design meetings, and said this isn’t good enough. ‘You have to come up with something better. This is not good enough.’

Greg Christie, former Apple vice president of human interface: You didn’t have to read the tea leaves. We had to start coming up with something better soon or ‘I’m going to give the project to another team.’

Forstall:  Steve said you have two weeks. We broke up different pieces of the design,  giving ownership to different people. That team worked 168 hours a week for two weeks. They never stopped. When they did stop, [they] got a hotel room across the road. At the end of two weeks, we’re looking at this thing, and we’re thinking this is phenomenal. We thought: We’ve cracked it!”

Christie : The first time he saw it, he was completely silent. He didn’t say a thing. He sat back and said ‘show it to me again.’

So we go through the whole thing again. Steve was pretty much blown away.  

ForstallThe biggest thing was the soft keyboard. We knew it would be compared to the Blackberry – the crackberry – the most popular smart phone at the time.

Somewhere in early 2006, we could see light at the end of the tunnel for the iPhone but the keyboard wasn’t there. The accuracy was poor.

So we froze all development on all applications. Every UI developer moved over and we said we’re going to spend a few weeks and everyone’s building keyboards.

Christie: We knew the general form factor but it was a while before we saw the industrial design. The hardware team wasn’t allowed to see the software side for a while. It was very compartmentalized.

Forstall: We put a poster up on the wall for The Fight Club. What’s the first rule of fight club? You don’t talk about fight club. What’s the first rule of about the Purple Project, is you don’t talk about the Purple Project. 

Christie: Not one person at the MacWorld SF show knew what the iPhone would look up before the keynote.

[When you look back on the launch June 29, 2007], the fact that you saw people lined up around parking lots, not just at Apple stores, but at every AT&T store…in retrospect, that was the first inkling that this is going to have broader societal impact, rather than just being the best phone ever.

 

 

CNN Producer: Trump-Russia Story ‘Bull****’ for Ratings

CNN Producer: Trump-Russia Story ‘Bull****’ for Ratings

It’s hard to keep up with the troubles at CNN these days, what with a failed hit piece against an associate of President Trump, which it had to retract (or face potential legal action), that led to resignations of three journalists from the newsroom who were involved with the fiasco.

And now comes the release of an undercover video by conservative activist James O’Keefe of Project Veritas that catches a CNN producer saying the network is aware that the Russia narrative regarding the president, which it covers a majority of the time, is “Bull****” —  but plays it for ratings, anyway. (The video, which CNN’s Anderson Cooper calls “damning,” is linked below.)

What’s going on at CNN? Or more importantly, what has happened to CNN’s brand as a news organization when an internal video of its newsroom explains how the CEO directs them to “get back to Russia” coverage when they know it’s “bull****?”

For its part, CNN has shrugged off the video, telling USA Today in a statement that “CNN stands by our medical producer John Bonifield. Diversity of personal opinion is what makes CNN strong, we welcome it and embrace it.”

But it’s part of a string of problems CNN has with its decision to join the opposition to President Trump and spin what it can in that goal.

The undercover video comes on the heels of a retracted story on CNN claiming that “Senate investigators were looking at the activities of the $10 billion Russian investment fund in connection to [Anthony] Scaramucci, who served on the executive committee of Trump’s transition team.”

The story was wrong, and relied on one anonymous source, which in itself should have raised red flags with the experienced journos involved with this, who know better, but chose to run with the story anyway.

As NPR notes in its roundup of what’s happened since the story was  retracted, those three veteran journalists involved with the story have left CNN’s employment:

Those who resigned Monday were Lex Haris, the executive editor of CNN Investigates who is a veteran editor at the network; Eric Lichtblau, who edited the piece and had shared a Pulitzer at The New York Times for his reporting on warrantless wiretapping during the George W. Bush administration; and Frank, who had been lured away from USA Today, where he had been a Pulitzer finalist.

Scaramucci has said in a tweet that he accepted CNN’s apology and is “moving on” from the issue. [Update:  NYPost reports that Scaramucci is moving on to the Trump Administration as head of the Export-Import bank.]

But the blowback to CNN’s reputation is creating a bigger blast radius around the cable news company, whose coverage of Trump’s first 100 days as president was ranked among the most negative of most of the major cable news outlets, according to the Harvard Shorenstein public policy center recent study.

One more problem that CNN created for itself involves its decision to remove the story from its site after its veracity was called into question, rather than updating the link to indicate the story was being retracted.

This is a big deal in any news-driven enterprise that relies on a business model of selling advertising against editorial that meets standards of accuracy and quality.

Back in this former journalist’s reporting/editing days, any request to take something “down” from the site – either over potential legal issues, etc., was a big-deal request that went straight up the chain, with sign off by CIO, Editor-in-chief, CEO and generally someone on the board of directors.

Taking down stories or deleting them is never done in a hurry or slap-dash and without consultation up the chain of management, which CNN appears to have skipped. Someone should be reprimanded for that alone.

Did the boss at CNN, Jeff Zucker, get too far involved with that decision without consultation of editorial best practices? It would follow the pattern of politicization of the news that he oversaw during his tenure at NBC before he joined CNN.

CNN is ruining its own political capital by dressing this up as adversarial journalism. It’s not and it’s obvious to everyone but is most partisan audiences.

Here’s the undercover video:

 

 

 

Wanted: Apprentices for Next-Gen Training

Wanted: Apprentices for Next-Gen Training

Germany is legendary for its apprenticeship and trade school programs in partnership with industry that confer high-level skill-sets on graduates and major earning power in manufacturing and skilled trades.

For too many years, vocational-technical training schools in the U.S. did not carry the same cachet or earning power compared to a college degree, or so the conventional wisdom went at the time.

But that’s changing.

The Trump Administration made last week a focus on Workforce Development with a series of events and an executive order that would expand these programs and offer more grants to industry. The order directs the Secretaries of Commerce and Labor to promote apprenticeships to “business leaders across critical industry sectors, including manufacturing, infrastructure, cybersecurity, and health care.”

The WSJ, in an editorial today, notes a few key details:

Nearly all apprentices receive jobs and the average starting salary is $60,000, according to the Labor Department. That beats the pay for most college majors outside of the hard sciences. Last year’s National Association of Colleges and Employers survey estimated the starting salary of education majors at $34,891 and humanities at $46,065.

Another problem is that few colleges and high schools teach vocational skills. The Labor Department Jolts survey of national job openings found more than six million in April—the most since Jolts began tracking in 2000. The vacancies include 203,000 in construction, 359,000 in manufacturing and 1.1 million in health care. These are not jobs that can be filled by Kanye West English deconstructionists. They are also typically jobs that can’t be supplanted by lower-wage foreign competition.

While employers subsidize most apprenticeships, the President has proposed spending $200 million to promote the programs. This would still be a drop in the $26 billion bucket (not including student loans) that Washington spends on higher education each year.

I have been lucky to spend some time with building trades apprenticeship programs, where apprentices are taught on traditional building skills, as well as cutting edge tech skills, such as Building Information Modeling (BIM) workstations.

Apprenticeships are also using virtual and augmented reality set-ups to train welders – a skill-set that pays well over $100,000 in salary in some markets where demand is high, such as the oil industry markets in the Southwest.

I also met many in the building trades and other sectors who have risen in their respective industries because a sharp educator steered them into vocational-technical training when they were early in their high-school educations.

A major shift in thinking is underway about next-generation training outside of the traditional four-year college degree. Expanding apprenticeships are part of the spirit of the times.

Amazon the Everything Store to Buy Whole Foods

Amazon the Everything Store to Buy Whole Foods

Amazon the everything/media/grocery/potentially collaboration store made waves today when it announced a $13.7 billion acquisition of Whole Foods Market Inc., which roiled the stocks of  retailers who sell groceries, such as Wal-Mart and grocery chains such as Kroger.

If Amazon the former bookseller was struggling to gain a foothold in the grocery business, given that most people tend to buy their food in person instead of online, this changes everything.

So far afield is Amazon from its roots as a book-seller these days. But clearly the $13.7-billion price tag for Whole Foods ranks as the biggest ever for the e-tailer and gives it a huge footprint in the bricks-and-mortar world, as the WSJ reported:

The acquisition, Amazon’s largest by far, gives it a network of more than 460 stores that could serve as beachheads for in-store pickup and its distribution network. It would make Amazon an overnight heavyweight in the all-important grocery business, a major spending segment in which it has struggled to gain a foothold because consumers still largely prefer to shop for food in stores.

We’re guessing you’ll soon be able to purchase lots of Amazon products at Whole Foods too. Who knows, maybe we’ll soon be conversing at the store using Alexa commands with Echo devices — or likely adding our list at home with Echo and opting on whether to have it delivered (via drones) or pick it up.

Wired.com’s take:

Although the deal surprised a lot of people, the e-commerce giant has long wanted to figure out the online groceries game. It started testing delivery concepts in August 2007, when it unveiled Amazon Fresh—delivering produce and pantry staples through its fulfillment centers. Yet even after a decade—eons in Silicon Valley time—it’s still trying. Turns out, the instant gratification business doesn’t quite work with fresh food.

Still, the market is just too lucrative—and too primed for disruption—for Amazon to simply give up.

But that’s not all for Amazon this week. News also broke that the company, whose founder Jeff Bezos also owns the Washington Post, is sniffing around collaboration provider Slack in a potential valuation worth $9 billion, according to a report in Bloomberg news.

The Whole Foods merger deal would need the approval of regulators, likely the Federal Trade Commission. Could it one day be facing anti-trust issues?

Big Finish to Infrastructure Week: Easing Permitting (with a Thud)

Big Finish to Infrastructure Week: Easing Permitting (with a Thud)

President Trump closed out his administration’s Infrastructure Week with a speech at the Department of Transportation that had all the elements of a solid event: Great speech-writing, a bi-partisan issue in the need to fix crumbling infrastructure around the USA, and effective visuals when the president held up thick binders of documents that builders generate — at $24,000 per page in one case, just to get the go-ahead to build.

One flowchart on display at the event was billed as a simplified version of highway permitting processes, which entails 16 different approvals involving 10 different federal agencies being governed by 26 different statutes.

The Trump Administration says it has allocated $200 billion in the president’s budget as part of a $1 trillion investment plan to rebuild infrastructure.

Streamlining permitting is a big part of that agenda, a point made with quite a thud during this clip, which says it all regarding the president’s plan to streamline the permitting process from an average of 10 years to two:

 

Big Trends with Big Data

One big piece of news from the event, though it likely won’t get much coverage or play in mainstream media outlets, is the announcement of an online dashboard system that will allow all stakeholders in the permitting process “to easily track major projects through every stage of the approval process,” as the president said during his remarks.

This is a significant development. Dashboards have been a big trend in corporate America for the past decade, and in more governments, to provide stakeholders quick views of key data points in one portal view.

This kind of stuff used to require database wonks to hand-code specific data feeds and then manually update them. Not anymore. Plenty of  data visualization platforms and software packages exist these days that can pipe in disparate data sources to one common view (our favorite is Tableau Software). For a federal government notorious for its gazillion data silos, none of them “talking to each other,” in IT parlance, this represents a big step forward in government innovation of IT systems and responsiveness to the public.

The goal, the president continued, is to create one point of contact to deliver a decision on projects, and to deliver that decision quickly, whether it’s a road, a highway, a bridge, a dam, and “get rid of the redundancy and duplication that wastes your time and money.”

Some municipalities are doing well by exposing publicly available data about projects on websites, and getting great responses from their constituents. For example, New York City has been posting building-permit updates from the Department of Buildings as part of its OpenData portal, which you can view here. (This is largely a legacy of Mayor Mike Bloomberg, he of the Bloomberg terminal that dominates most traders’ desks in the finance world, and who pushed to modernize the city’s use of data.)

As part of the president’s vision of streamlining the federal permitting process, his team is setting up a new council that will oversee the dashboard portal and “make sure every federal agency that is consistency delaying projects by missing deadlines will face penalties.”

They Mean It

The Infrastructure Week events, for those of you who might have been consuming other news this week, included a speech in Ohio where the president laid out his vision for American infrastructure and his plans to modernize inland waterways, which are plagued by aging systems in need of costly upgrades. The Department of the Interior also weighed in.

Vice President Mike Pence also played a role in the week’s events, telling a luncheon summit that “America only has the 12th best infrastructure in the world.  Think about that for a second.  The most powerful economy on Earth by a lot has the 12th-rated infrastructure on the planet.  We’re miles behind countries like Japan and Germany, just to name a few.”

Also on the agenda: the president’s support for a plan to privatize the Federal Aviation Administration’s long-delayed efforts to bring the air traffic control system into the 21st Century, which has rare bi-partisan support.

During a meeting with state governors and mayors this week, addressing how the states can attract more private investment and alternative financing ideas to get projects off the ground, President Trump highlighted the innovation that many states are pioneering, such as Florida’s I-4 ultimate project.

“Because of their innovation approach and because of the way they went about getting it and getting the approvals, the project is anticipated to be completed 17 years earlier than it would have through more traditional funding methods. These are the kind of projects we want to see all across the country.”

In a week of all kinds of news about the administration and big political news around the globe after the elections in the U.K. clobbered Prime Minister Teresa May’s coalition (The Economist wins best headline: Polling in the Deep),  June 6-10th should be noted for what it represents to government reformers and builders, no matter their political stripe: The Builder-in-Chief means what he says. This was a big week for the president to follow-up on his promise to rebuild the country.

 

 

 

A Week’s Worth of Infrastructure, a Generation’s Worth of Fixes

A Week’s Worth of Infrastructure, a Generation’s Worth of Fixes

The Trump Administration is reportedly putting the President’s Bully Pulpit to work this week with a series of announcements and tours focusing on critical infrastructure issues across the United States.

First up, reports the Washington Post, will be a spotlight on the Next-Gen efforts by the Federal Aviation Administration, and a plan to privatize the nation’s air traffic control system.

The president has invited executives from major airlines to join him as he kicks off the week with one of his more controversial plans: spinning off the air traffic control functions of the Federal Aviation Administration to a nonprofit corporation.

It’s an idea that has been tried many times before, dating back to the Clinton administration and, most recently, last year in legislation championed by Rep. Bill Shuster (R-Pa.), chairman of the House Transportation Committee. His bill never made it to the Senate, where several key GOP members resisted the idea of transferring government assets to a corporation.

Advocates of the idea argue that privatization would speed up glacial efforts by the FAA to modernize a system that still relies on land-based radar at a time when other countries have switched to GPS systems that allow more direct routes at lower costs.

The FAA has been planning to bring several of its major air traffic control facilities on line with Automatic Dependent Surveillance-Broadcast (ADS-B) technology, a key underpinning of its NextGen system that provides surveillance for tracking aircraft.

The FAA’s delays in modernizing the air-traffic system are by now infamous,  even by Washington’s standards on project management milestones that just drag on for years. Here’s one example from 2014:

A new report from the Department of Transportation’s Office of Inspector General says the FAA’s implementation of ADS-B continues to suffer from delays, cost overruns, and technical problems that make it difficult for the FAA to fully justify investments in the system. The report findings echo concerns raised by AOPA and others about the need to manage costs and provide clearly defined benefits for end users.

Right now, air-traffic controllers largely use a communications system with pilots that relies on walkie-talkies on a VHF frequency. It speaks volumes that the air traffic controllers union also supports a privatization plan to lift this project out from under the weight of all those FAA bureaucratic layers that drag on for years. We have a president who wants to help reformers fix how the system works.

Politico, meanwhile, notes that “Monday’s announcement will be the most revealing look yet at the administration’s thinking on the issue. Shuster is expected to attend the White House festivities, which will include an announcement in the Rose Garden.” This will be a big update following the fact sheet on infrastructure that the White House inserted into the 2018 budget proposal.

Then the Trump Team heads to Ohio and Kentucky for speeches where “Trump will outline more about his infrastructure vision and how his administration plans to support rural and ‘transformative’ projects.”

It’s going to be a great week for those of us who keep an eye on infrastructure in America!

 

 

Drone Swarms in Action

Drone Swarms in Action

To watch the fascinating video of a drone swarm released by the Department of Defense this week is to see life not only imitate science-fiction movies, but also show us how far-ahead in real-life these robotic swarms are.

(Article about the successful testing of them in January is here.)

Beyond the drone-delivery phenomenon pushed by Amazon and others, or the Federal Aviation Administration’s attempts to come up with rules for hobbyist drones without a court knocking them back, these three videos in my opinion sum up the major implications that these robotic swarms represent for so many industry verticals, beyond construction (but watch how these things can build stuff in the next Vijay Kumar video farther down).

The spatial reasoning that these drones display — the leader-follower networking capabilities, and other behaviors such as “collective decision-making, adaptive formation-flying and self-healing” is at once amazing and,  for those of us who watch too many sci-fi movies, slightly terrifying and exciting at the same time.

But when I think of the blistering pace with which these machines are advancing in intelligence, and how countries not so friendly to us would use them, it’s also reassuring to know the DoD is advancing their research and use.

 

Drones have been a huge help to constructors for some time now, especially for checking on hard-to-reach spaces in the building trades and tracking as-builts. But what does feel new, nano-second new, are the advanced AI and adaptive abilities infused in these “robot swarms.”

In this TED Talk video from 2015,  Vijay Kumar of the University of Pennsylvania engineering department and of Kumar Robotics  shows how robotic swarms are building high-resolution maps, and working together on (simple) construction (with a cameo by David Pogue).

Take this video from a 2016  TED Talk by Raffaello D’Andrea of DynamicWorks, who is also a professor of dynamic systems and control at the Swiss Federal Institute of Technology (ETH Zürich, Wikipedia link is here.) to see how algorithms create tech creatures that can solve problems on the fly, such as shifting aerial moves after he clips one of its wings, and re-orienting themselves as they are thrust into new surroundings.

 

Here’s the video of D’Andrea clipping one of the drone’s wings (at about 6:36).

Updated 5/27/17 to add correct video of the wing-clipping moment.

 

FMI Sees 6% Construction Growth in 2017

FMI Sees 6% Construction Growth in 2017

FMI, a management consulting and investment banking firm focused on engineering and construction, infrastructure and the built environment. has come out with its forecast for non-residential construction for 2017 and it dovetails with other forecasts at about 6% growth overall.

ConstructionPros.com has a summary:

Highway and Street – Highway and street construction increased just 1% in 2016 to $91.0 billion. FMI forecasts 3% growth for 2017 and another 4% in 2018. The Fixing America’s Surface Transportation (FAST) Act for highway and transportation funding removed some uncertainty for highway funding; however, we do not expect a significant jump in spending over current levels. Although much political discussion is being generated around infrastructure with highways, streets and bridges being high on the list, no real plans are in place at the federal budget level.

The full report is here in PDF format: Outlook_2017Q1_FINAL_DIGITAL.

 

 

Dodge Data Sees Positive Outlook for Trump Infrastructure Agenda

Dodge Data Sees Positive Outlook for Trump Infrastructure Agenda

I was thrilled to have been invited to construction data firm Dodge Data & Analytics’ Construction Outlook update in New York City recently. Dodge prepared the update to reflect the priorities, outlook and improved business sentiment under the Trump Administration’s America First agenda and Infrastructure and Public Works as part of that focus on rebuilding America’s wealth. It expects to distribute to clients later this week.

Key takeaways by Robert Murray, chief economist of the former Dodge division of McGraw Hill Construction division of S&P:

“During the first half of 2017, we had a sense [that] the current [construction] expansion was getting long in the tooth, and we were wondering how much further could it go. Then the election happened and the mood began to change, with headlines such as this:

Big Post Election Bounce

Executives See Gains from Trump Administration Agenda

“Here we now have,” Murray noted of the business sentiment after the November election, “someone in the White House who knows construction, so wow, with infrastructure, things could be changing for the better.”

Even for the dismal science that economics forecasting can be, Murray and his team see positive signs for the strength of the construction expansion in key public works and infrastructure sectors that will be key to the Administration’s infrastructure agenda, when its turn comes in Congress. He notes:

  • —Expect to see the construction expansion continuing in ‘17 and throughout ‘19
  • —Murray (and his economics team) see an increase in growth in ‘17, ‘18 – some flattening out in ‘19, ‘20, ‘21
  • —Public Works sector growth expected at 6% in 2017, +7 % in ‘18
  • Expect to see greater contribution from institutional and public works overall, adding to the current cycle of expansion in the construction industry.
  • —Just don’t expect a repeat of the boom years (2000s).

For those of you who prefer PowerPoint, here’s a deck of some key takeaways from the presentation:

Dodge Data Construction Outlook2017.Updated

New House Bills Floated to Fund Infrastructure

New House Bills Floated to Fund Infrastructure

Updated: E&ENews is reporting of revived bi-partisan efforts in the House to introduce new bills to fund infrastructure spending.

“Rep. Peter DeFazio (D-Ore.), the ranking member on the Transportation and Infrastructure Committee, introduced legislation to raise the gas tax by around a penny a year. The bill, H.R. 1664, would generate around $500 billion to rebuild U.S. roads, bridges and transit systems through 2030.

“DeFazio said he had shared the proposal with D.J. Gribbin, who has been organizing White House talks on the infrastructure package. The White House hasn’t told him no yet, he said.

“The Oregon Democrat said he hoped support from [President] Trump for the idea could sway Republican congressional leadership, including Rep. Bill Shuster of Pennsylvania, the top Republican on the Transportation and Infrastructure Committee.

Accounting Today gives another breakdown of the two bills introduced:

“One of the bills, co-sponsored by Rep. Rodney Davis, R-Ill., is called the Partnership to Build America Act. It would create an American Infrastructure Fund to finance state and local infrastructure projects, capitalized through a one-time $50 billion bond sale to U.S. corporations looking to repatriate part of their international earnings. The fund could be leveraged at a 15:1 ratio to provide up to $750 billion in loans or guarantees to state and local governments for infrastructure projects.

“The other bill, co-sponsored by Rep. Ted Yoho R-Fla., is known as the Infrastructure 2.0 Act. Originally introduced by Delaney in 2013, it too would create the American Infrastructure Fund, as well as provide extra revenue to expand the Highway Trust Fund using international tax reform. Under the Infrastructure 2.0 Act, U.S. multinationals’ existing foreign profits would be subject to a one-time tax of 8.75 percent, replacing the tax deferral option and the current top corporate tax rate of 35 percent.

“To encourage action, the legislation includes a forcing function, so if more comprehensive tax reform is not enacted by Congress, a fallback international tax reform package would take effect. Under this option, for active-market foreign income, companies would pay a 12.25 percent tax to the U.S. on overseas profits if they are currently paying no tax, and a 2 percent tax to the U.S. if they are already paying an average of 25 percent abroad, with a sliding scale in between.

BondBuyer.com has this:

“The legislation was filed as a new study by Moody’s Investors Service forecasts a slow ramp up to increased federal infrastructure spending due to a lack of bipartisan agreement over funding mechanisms and how to implement a massive infrastructure program.

“Moody’s expects additional infrastructure spending to be modest in 2017 and 2018 despite calls by President Trump and Senate Democrats for $1 trillion over 10 years of new funding in separate proposals, said AJ Sabatelle, a managing director at Moody’s and the lead author of the report.

Key reasons to keep an eye on the healthcare reform bill [UPDATE: oh well].  Onward to tax reform.