Archive for the ‘News’ Category

Tuition Fee Rise Caused Bump Of Up To 74% In Student Debt

Friday, March 30th, 2018

Higher tuition fees led to an increase in student debt of as much as 74%, according to new research.

And while students from higher income backgrounds have been able to turn to their families for help with the debt, those from more disadvantaged backgrounds are increasingly having to work to pay their way through university, or opting not to go in the first place.

A survey of income and expenditure among students has, for the first time, captured in detail the impact of the U.K. government’s controversial decision to lift the cap on tuition fees.

While fees had previously been limited to a maximum of £3,325 ($4,715) a year, they were raised to a maximum of £9,000 ($12,760) with effect from September 2012, and now stand at £9,250 ($13,115) in all but a handful of universities, making U.K. students the most indebted in the world.

The survey found that while first year students had an average net debt of £5,933 ($8,411) in 2011/12, by 2014/15, after the cap on tuition fees was raised, that figure had risen to £10,300 ($14,600), an increase of 74%.

Second year students saw their net debt increase by an average of 65% to £21,361 ($30,287) and third years by 63% to £28,811 ($40,851), according to the survey of more than 5,000 students.

Although student debt was expected to rise once the cap was lifted, the scale of the increase still comes as a surprise.

While the survey was carried out in 2014/15, the findings have only just been released by the Department for Education.

Continuing controversy over the level of student debt and fees has prompted the government to open a review into tuition fees and university funding, although prime minister Theresa May has ruled out scrapping the fees altogether.

One option floated by government is to tie the level of fees universities are allowed to charge for each course to the average salary of graduates, although this has been criticized for penalising universities for offering humanities and social science courses.

Publication of the survey on student income coincides with research looking at the role of financial factors on student decisions around higher education.

Around 2,500 applicants for higher education and first year students were surveyed on issues including how their attitude to university was affected by tuition fees and student loans.

Although financial factors were not the biggest influence on a student’s decision whether or not to apply for university, applicants from lower socio-economic groups did put greater importance on the availability of grants and bursaries and the impact of living costs than their peers from more affluent backgrounds.

Only 5% of applicants said the introduction of student loans meant they would not apply to university, among lower socio-economic groups that figure rose to 8%.

And while applicants from higher socio-economic groups were more likely to envisage relying on their parents or savings to make up the shortfall in the move from a grants-based to a loans-based system, those from lower socio-economic groups were more likely to say they would use paid work as a source of replacement funding.

Education Policy Design: The High Stakes Business Of Educating Students

Tuesday, March 20th, 2018

The American education system is experiencing vast transformation requiring schools to rethink how they teach students, evaluate the education marketplace, and exercise fiduciary responsibilities at the state and district levels. The net neutrality policy reversal from the Federal Communications Commission (FCC) and continuing implementation of the requirements associated with the Every Student Succeeds Act (ESSA) provide a sampling of the ever-expanding legislative canvas impacting education on a massive scale.

These reforms are not accidental, but rather the product of substantial federal and state-specific policies. These dynamic policy shifts mirror the new public policy arena in which elected officials are reworking the political playbook by rethinking, rebuilding and challenging legacy institutions. Education officials and education technology companies alike continue to ponder how to successfully engage one another and those authoring legislation.

Next month’s annual installment of the ASU+GSV Summit should once again prove that questions remain, as they did in 2017, over the direction federal policy will take and subsequent reactions by decision makers in the education sector. There are significant dollars at stake for those building edtech and those charged with selecting technology to usher in the future of teaching and learning.

The economic landscape of education is significant. From 2010 to 2016, over $2.3 billion was invested in K-12 education technology companies in the U.S., according to EdSurge’s intensive State of EdTech report, and when including edtech companies serving the postsecondary market, total investments in 2016 alone surpassed the $1 billion mark across 138 venture deals. A report from EdTechXGlobal and IBIS Capital has forecasted the global edtech market to exceed $250 billion by 2020. The intersection of market interest, active policy, and a new, savvier group of education leaders puts legislative practice and engagement at a premium.

Yet, in the face of these reforms, many educational authorities and market-serving companies interact with the legislative process with outdated tactics, limited creativity, and mixed results. There are, however, school districts and education companies capitalizing on this new horizon by engaging in the policy creation process, yielding tremendous value for American education and their respective organizations.

Active Engagement Creates Better Opportunities

Adam Giery, Partner with Strategos Group, a national consulting firm specializing in technology and education, routinely interfaces with school district leaders, education companies and policy makers. Giery provides strategic insights to companies and school districts as they attempt to understand and navigate both current and proposed legislation.

According to Giery, “Education companies founded on disruption seeking to meaningfully engage in the legislative process forgo their creativity and undertake a traditional legislative engagement plan: meetings, follow up, more meetings. While a basic tenet of advocacy, it can be a low value transaction for both the organization and legislative leader.”

He added that organizations should be asking one question: “What is the value in government advocacy? As in, ‘how can our organization create value for the political process and what can we yield from our dutiful work?’ Inserting your expertise to improve a core function of education creates better policy, develops a deeper understanding by both parties, and potentially a new opportunity for your organization.”

The organizations that prove to be most effective are those that actively engage in the design and development of policy. Giery believes that this intentional approach creates superior public policy and a market edge for organizations bold enough to engage. District leaders find themselves in much the same position as edtech companies, trying to establish a comprehensive and persistent path of engagement with policymakers.

Identifying The Players and Determining Appropriate Roles

Dr. Tom Shelton, former Superintendent of the second-largest school district in Kentucky and current Executive Director of the Kentucky Association of School Superintendents, shares Giery’s perspective that it’s important to build and maintain productive relationships with those who integrate public policy into district and corporate practices.

Shelton, however, adds caution as a key variable in the approach needed from state and local education agencies: “As a superintendent balances the many priorities that require their time and attention, the legislative process can be an opportunity to obtain direction, support, and resources but so often becomes a political quagmire filled with personal agendas that become, at the least, noise, but often a complete distraction from the real business of schools.”

This common frustration from education leaders is shared with education companies, asserts Giery, by limited publicly available information and a myriad of potential lobbyists seeking to acquire their next client. Essentially, this creates a market in which organizations are not apprised of the contacts, counsel, and capacity necessary to achieve their objectives.

“Generally speaking, most lobbyists enter the profession through two avenues: contacts or content. The ‘contacts’ lobbyists generally trade on their relationships with specific individuals. ‘Content’ lobbyists are issue-specific, often consulted for policy development.”

Giery believes it’s not possible to provide a definitive evaluation of which lobbying style outperforms the other, but it is critical that advocates are aligned with organizational needs and missions.

Like the private sector, a school district’s role in engaging lobbyists and, more broadly, policy leaders, becomes an artful dance between hope and reality, according to Shelton. “A Superintendent learns to become adept at managing shrinking resources and leading change or they won’t survive the demands placed on them by micromanaging legislators and others,” he explains.

Finding The Right Approach

To be clear, the core fundamentals of ‘blocking and tackling’ will always remain a function of the legislative process, but expecting a lobbyist to serve as a policy magician is unrealistic. Giery warns, “ Ignoring the interplay between the business, practice, and policy driving education is at the peril of each respective entity. Savvy schools, districts, and companies servicing the education market have to make legislative literacy a key and active component of their work.”

The opportunity cost of not engaging in this process only becomes more evident as the investment dollars increase for newer, more compelling ways to integrate technology into the education ecosystem. Policy design embedded with the thought leadership and know-how of industry and sector-specific expertise brings students closer to having the societal and economic impact desired on a national scale to fruition. It behooves all education sector leaders to seek out guidance on policy engagement, and proactively participate in the process.

Commissioners Comment on Circuit Court Ruling in ACA v. FCC

Tuesday, March 20th, 2018

Now that the D.C. Circuit Court has issued its long-awaited decision in the case of ACA International, et al., v. Federal Communications Commission (FCC), all parties are looking to what’s next. The main point of the Telephone Consumer Protection Act (TCPA) was to curb unwanted and illegal robocalls. ACA and others argued that the FCC’s 2015 Declaratory Ruling and Order went too far, setting unrealistic hurdles, and likely preventing legal and wanted calls.

It is clear that today’s FCC leadership holds a vastly different opinion about the TCPA and the 2015 Order than did the leadership under former Chairman Wheeler. FCC Commissioners released the following statements following last Friday’s decision.

Chairman Ajit Pai

“Today’s unanimous D.C. Circuit decision addresses yet another example of the prior FCC’s disregard for the law and regulatory overreach. As the court explains, the agency’s 2015 ruling placed every American consumer with a smartphone at substantial risk of violating federal law. That’s why I dissented from the FCC’s misguided decision and am pleased that the D.C. Circuit too has rejected it.

“Instead of sweeping into a regulatory dragnet the hundreds of millions of American consumers who place calls or send text messages from smartphones, the FCC should be targeting bad actors who bombard Americans with unlawful robocalls. That’s why I’m pleased today’s ruling does not impact (and, in fact, acknowledges) the current FCC’s efforts to combat illegal robocalls and spoofing. We will continue to pursue consumer-friendly policies on this issue, from reducing robocalls to reassigned numbers to call authentication to blocking illegal robocalls. And we’ll maintain our strong approach to enforcement against spoofers and scammers, including the over $200 million in fines that we proposed last year.”

Commissioner Michael O’Rielly

“I am heartened by the court’s unanimous decision, which seems to reaffirm the wording of the statute and rule of law. This will not lead to more illegal robocalls but instead remove unnecessary and inappropriate liability concerns for legitimate companies trying to reach their customers who want to be called. In effect, it rejects the former Commission’s misguided interpretation of the law, inappropriate expansion of scope, and irrational view of reassigned numbers. While I disagree with the court’s decision on the revocation issue, I believe there is an opportunity here for further review in order to square it with the Second Circuit’s more appropriate approach.”

Commissioner Brendan Carr

“In the Telephone Consumer Protection Act (TCPA), Congress enacted provisions to help combat the unwanted robocalls that have become a far too common nuisance for far too many Americans. Unfortunately, the prior FCC exceeded the scope of the TCPA and reached a decision of “eye-popping sweep,” as today’s D.C. Circuit decision states. Rather than focusing our efforts on combatting illegal robocalls, the 2015 FCC decision opted to subject consumers and legitimate businesses to liability. Thankfully, the D.C. Circuit, in a unanimous decision, has now corrected that error. In the meantime, this FCC has elevated robocalls to our top enforcement priority, and we have already taken a number of important steps to combat those unlawful calls. Going forward, I welcome the chance to continue working with my colleagues and all stakeholders to ensure that our rules protect consumers and legitimate businesses while targeting unlawful scammers and robocallers.”

Commissioner Jessica Rosenworcel

“Robocalls are already out of control. One thing is clear in the wake of today’s court decision: robocalls will continue to increase unless the FCC does something about it. That means that the same agency that had the audacity to take away your net neutrality rights is now on the hook for protecting you from the invasion of annoying robocalls. It’s past time for the American public to get a serious response from the FCC—and a reprieve from the unrelenting nuisance these calls have become for so many of us.”

Commissioner Mignon Clyburn did not release an official statement.

Where do we go from here?

In this other article published on insideARM today, Eric Troutman notes,

“…for every TCPA question the D.C. Circuit answered its ruling raises many more. Indeed, Judge Srinivasan’s opinion poses at least a dozen specific questions back to the Commission to consider on remand. Unfortunately, therefore, we are all a long way from having final answers on most issues. [The good news is that with] Chairman Ajit Pai at the helm of the FCC, industry has very good cause to think that real TCPA change is on the horizon.”

Meanwhile, on a related/parallel path, on Friday the FCC and FTC will jointly host a Policy Forum on Fighting the Scourge of Illegal Robocalls. They released the agenda yesterday.

The Joint Policy Forum is open to the public and registration is not required, but seating is limited. Attendees are advised to arrive at least 30 minutes prior to the event to allow time to go through security.

The Joint Policy Forum will be webcast on the FCC webpage at

10 Things You Need to Know About the Long-Awaited D.C. Circuit’s TCPA Ruling

Tuesday, March 20th, 2018

Well the big ruling is out. Last Friday the D.C. Circuit Court of Appeal handed down its long awaited ruling in ACA Int’l v. FCC, No. 15-1211, Doc. No. 1722606 (D.C. Cir. Mar. 16, 2018). The truth is, however, for every TCPA question the D.C. Circuit answered its ruling raises many more. Indeed, Judge Srinivasan’s opinion poses at least a dozen specific questions back to the Commission to consider on remand. Unfortunately, therefore, we are all a long way from having final answers on most issues. I guess that’s not really much of a surprise, however, since nothing is ever simple in TCPAland. That said, with Chairman Ajit Pai at the helm of the FCC, industry has very good cause to think that real TCPA change is on the horizon.


Before we get into that, some quick background is in order for any reader who isn’t completely conversant with the history here. The Federal Communications Commission (“FCC” or “Commission”) is the government agency responsible for implementing (i.e. interpreting) the Telephone Consumer Protection Act (“TCPA”). The TCPA generally prevents calls to cell phones made using an automated telephone dialing system (“ATDS”) without the express consent of the “called party.” The FCC’s rulings regarding the meaning of vague phrases within the TCPA (like what’s an ATDS?) are binding on courts and private litigants alike. While this sort of arrangement works fine for 99.9% of federal statutes, the TCPA is incomparably vague, regulates a common activity—phone calls—and contains a massive $500.00 per violation minimum statutory penalty that can be privately enforced. This gives the FCC tremendous power to determine the lawfulness of phone calls and, indirectly, the contours of free speech in this country.

More pertinently, whenever the FCC interprets the TCPA in a manner that expands its reach, private lawsuits go through the roof. Prior to President Trump appointing Chairman Pai to lead the FCC—more on him in a moment— the TCPA went through a lengthy expansionary phase under the watchful eye of then-Chairman Tom Wheeler. While Chairman Wheeler seems like a fine fellow, his policies vastly expanded the reach of the TCPA to the point—as the D.C. Circuit points out in the ACA Int’l ruling—that every smartphone in the country became a federally-regulated autodialer. While the FCC’s stated goal in enacting these changes was to give itself the means to aggressively enforce the statute against true bad actors—almost exclusively unscrupulous telemarketers—it turned a blind eye to the explosion of private TCPA lawsuits its policies were enabling against good industry actors, most of whom were just trying to chat with their customers at phone numbers they had been lawfully provided.

The crown jewel of the FCC’s former “expand the TCPA so we can go after bad telemarketing guys and we’ll just hope that private litigants don’t abuse it” policy was the Commission’s 2015 TCPA Omnibus ruling. That ruling expanded the reach of the TCPA to regulate virtually any software-enabled dialing device, made the essential express consent defense as fragile as a bubble, and saddled callers with the risk of calling wrong numbers even when a number changed hands without their knowledge. A predictable and instantaneous explosion of private TCPA suits followed—over a quarter of which were class actions seeking capless statutory damage recoveries often ranging into the billions of dollars—prompting some to muse whether TCPA actually stood for “Total Cash for Plaintiff’s Attorneys.”

The 2015 TCPA Omnibus ruling was challenged by a team of Petitioners—lead by the good folks over at ACA International and joined by my friends at CBA—on a duly-authorized appeal to the D.C. Circuit Court of Appeals. Oral argument was held back in October 2016, and ever since then TCPAland has waited, with baited breath, for the D.C. Circuit’s definitive ruling on the lawfulness of the Omnibus.

Now what?

So now that the ACA Int’l ruling has been handed down, it falls to me to speak definitively as to its impact on the litigation landscape. Accordingly, here are the 10 things you need to know right now:

1. Chairman Pai is Going to Get His Chance to Make a Mark on the TCPA and I Can’t Wait to See What He Does With It.

Since Ajit Pai was elevated by the Trump administration from mere Commissioner to Intergalactic Overlord and Chairman of the FCC, he has set about unwinding most of the work performed by his predecessor, Chairman Wheeler, especially in the net neutrality space. There has been a deafening silence on TCPA-related issues from the Commission, however. Indeed, despite a current glut of petitions that now nearly rivals the count of petitions that had piled up ahead of the Omnibus ruling, the Commission has seemed steadfastly uninterested in unwinding the expansionist policies of the prior administration. Presumably, this was out of due respect for the pending petition before the D.C. Circuit, and a desire not to create havoc in the appellate court system by issuing serial rulings that would wind their way through independent appellate reviews before the same circuit court of appeals that had yet to speak on the Omnibus. Now that the D.C. Circuit has given its nod to the FCC to start over again on a number of key TCPA issues, however, you can bet that Chairman Pai—who once famously called the TCPA a “statutory-rifle shot” when remarking on how limited Congress had intended the statute to be—will take the ball and run with it. Indeed, as shown below, the ACA Int’l ruling is something of a lob pass to the Commission on several key TCPA issues, and we can expect Chairman Pai to finish that alley-oop with a two-handed slam dunk that will get industry onlookers up out of their seats and roaring their applause.

2. The D.C. Circuit Panel Thinks the Petitioners Missed a Major Issue Regarding the Scope of the TCPA—the Statute Might Only Apply to Calls Made Using a Dialer’s Automatic Capacity!

At oral argument back in October 2016, Chief Judge Edwards was heard to forcefully chastise Petitioners’ counsel for conceding that any call made using an ATDS was subject to the statute, even if the call itself was made manually. “Good heavens, that’s your strongest argument and you just conceded it away,” he remarked at the time. The statement was one of a number of remarkable exchanges between bench and bar that played out at the oral argument, and you can read more about the hearing here. It appears that Chief Judge Edwards swayed the panel into his way of thinking, as the ACA Int’l ruling repeatedly makes mention of the Petitioners’ failure to challenge whether calls made without leveraging a device’s “capacity” to operate as an autodialer—more on “capacity” next—are even subject to the TCPA to begin with. As the opinion notes, if not, then “[e]ven if the definition encompasses any device capable of gaining autodialer functionality through the downloading of software, the mere possibility of adding those features would not matter unless they were downloaded and used to make calls.” ACA Int’l at 30-31. The opinion directs the Commission to take this issue into account when reconsidering the petitions. (Notably, however, the Petitioners might have been conceding like a fox—it is precisely because the Court was made to assume that all calls made from an ATDS were subject to the TCPA that it was forced to strike down the TCPA’s interpretation as overly broad, as explained in the next section. Pretty clever, if that was Petitioners’ plan all along.)

3. The Quibble over “Present” Versus “Future” Capacity was a Complete Red Herring—What Mattered to the Court was the FCC’s Focus on Software-Enabled Dialing Devices.

For years now (literally), I’ve had to endure, and sometimes even unwillingly engage in, a more-than-academic debate over whether equipment has current or potential capacity to operate as an ATDS. As the D.C. Circuit points out, however, that entire semantic debate is hogwash: “[v]irtually any understanding of ‘capacity’ [] contemplates some future functioning state, along with some modifying act to bring that state about.” ACA Int’l at 13. But so what? The real issue is whether the FCC’s ruling faithfully tracks Congressional intent with respect to the reach of the statute. And while the D.C. Circuit Court was respectful of the FCC’s authority to delineate those limits, it could not abide by the Commission’s expansion of the statute “several fold” over what Congress intended. As the D.C. Circuit views matters, smartphones are absolutely within the reach of the Omnibus ruling. This is no surprise, as I wrote back in August 2016: “Now, any piece of dialer equipment is governed by the TCPA so long as it can be converted into an autodialer ‘through [future] software changes or updates.’ As demonstrated in the second paragraph of this article, this definition now plainly includes that piece of sophisticated dialing equipment sitting right in your pocket—your smartphone.” Although the D.C. Circuit did not credit me for the analysis, it reached the exact same conclusion and for the exact same reason. The ACA Int’l opinion explains: “[t]he [Omnibus] ruling states that equipment’s ‘functional capacity’ includes ‘features that can be added…through software changes or updates’…[so] ‘a piece of equipment can possess the requisite “capacity” to satisfy the statutory definition of an “autodialer” even if, for example, it requires the addition of software to actually perform the functions described in the definition.’” ACA In’tl at 14-15. It concludes that such a definition necessarily encompasses smartphone technology. And since smartphones are used by hundreds of millions of Americans, but the TCPA—based on the legislative history—was only designed to regulate “hundreds of thousands” of unlawful callers, the FCC’s expansion of the TCPA went far beyond what Congress intended in enacting the statute. On that basis, the FCC’s interpretation of “capacity” was struck down as unreasonable.

4. The FCC Ran But It Couldn’t Hide on Whether Smartphones Were Within the Scope of the Omnibus Ruling.

In its opinion, the D.C. Circuit noted that the FCC refused to concede that smartphones were within the reach of the Omnibus. Its lawyers repeatedly argued that the Omnibus never reached that specific issue, which was reserved for a future petition. The D.C. Circuit was unmoved, and determined that the Omnibus ruling’s failure to address the issue was in and of itself an arbitrary and capricious act. Specifically, in the D.C. Circuit’s view, if the Omnibus does not include smartphones, then the ruling fails to “articulate a comprehensible standard.” See ACA Int’l at 21-23.

5. The Court Directs the FCC to Clarify Whether the Use of a Random or Sequential Number Generator is a Necessary Feature of an ATDS—and the Fate of Predictive Dialers Hangs in the Balance.

And this is where things getvery interesting. In the D.C. Circuit’s view, the Omnibus does not answer the crucial question of what capacity is required to make a device an ATDS. Although the Omnibus affirms previous orders suggesting that predictive dialers are within the scope of the ATDS definition, the Omnibus also suggests that a dialer is only an ATDS if it has the capacity to generate random or sequential numbers. These two positions, the Court finds, are irreconcilable because the record plainly demonstrates that not all predictive dialers have the capacity to dial randomly or sequentially. Thus, the D.C. Circuit tees up a crucial issue: “A basic question raised by the statutory definition is whether a device must itself have the ability to generate random or sequential telephone numbers to be dialed. Or is it enough if the device can call from a database of telephone numbers generated elsewhere?” ACA Int’l at 25. But the D.C. Circuit refuses to answer the question for the Commission and instead does exactly the opposite, finding, “It might be permissible for the Commission to adopt either interpretation.” ACA Int’l at 27. Wow! So the D.C. Circuit just handed the keys to defining an ATDS—which sits at the very heart of the application of the TCPA—to Chairman Pai, who is already on record as stating, “In short, we should read the TCPA to mean what it says: Equipment that cannot store, produce, or dial a random or sequential telephone number does not qualify as an automatic telephone dialing system because it does not have the capacity to store, produce, or dial a random or sequential telephone number.” So maybe, just maybe, the final reversal of the TCPA’s application to predictive dialers—and other dialers that call based upon lists of numbers—is in the cards. Then again, the D.C. Circuit made quite clear that if the FCC wishes to depart from the statutory requirement that an ATDS must make use of a random or sequential number generator, then the D.C. Circuit is likely to bless that too! So an epic showdown is set up before the Commission.

6. What About Human Intervention? The Court Suggests that It Only Matters if the Commission Chooses to Depart from the Requirement of a Random or Sequential Number Generator.

In the D.C. Circuit’s view, the FCC’s after-the-fact pronouncement that an ATDS is something that dials without human intervention and can dial thousands of numbers at a time is just not very useful. As the opinion notes, the Commission has never clarified what human intervention is required, and what dialing thousands of numbers at a time really means. The Court also cannot square the Commission’s observation that a lack of human intervention is the hallmark of an ATDS with the Commission’s subsequent denial of a petition seeking clarification that an ATDS must operate without human intervention. The D.C. Circuit also does not understand what weight is to be given to these seemingly invented attributes of an ATDS, and how they correspond to the statutory requirements. On reconsideration of the issue, therefore, the FCC must—if it chooses to depart from the statutory requirement of using a random or sequential number generator—explain how and when a dialer operates without human intervention, and within just how much time must a dialer be able to dial all those thousands of numbers the Commission keeps mentioning. Again, however, these only seem to be questions that the Commission must answer if it wishes to depart from the statutory requirement of random or sequential number generator.

7. Reasonable Reliance Is Now the Touchstone of Express Consent—and This is a Very Big Deal.

Although the ATDS portions of the ruling are going to get top billing, the most important piece of the ruling, from my perspective, is the D.C. Circuit’s adoption of the FCC’s “reasonable reliance” approach to express consent. The ACA Int’l ruling repeatedly—nearly obsessively—references the FCC’s determination that callers must be able to reasonably rely on consent provided by former subscribers. Indeed, it was this loophole—intended by the FCC to justify nothing more than a one-attempt safe harbor—that the D.C. Circuit ultimately used to reverse that portion of the ruling as arbitrary and capricious. Specifically, the ACA Int’l ruling finds that it was arbitrary and capricious for the FCC—at least on the record before it—to conclude that one attempt was likely to afford a caller reasonable notice that a number had changed hands. As a result, the D.C. Circuit sets aside the one-call safe harbor and instructs the FCC to try again. More importantly to companies being sued in reassigned number suits, the D.C. Circuit has blessed the idea that a caller can reasonably rely on consent afforded by a previous subscriber, which leads to the next point…

8. The FCC’s Definition of “Called Party” Was Set Aside—and “Intended Recipient” is Still in Play!

It’s easy to get confused by the opinion with respect to whether the D.C. Circuit approves of the FCC’s definition of “called party.” Some may say that the D.C. Circuit affirmed the FCC’s determination that “called party” does not mean “intended recipient.” But that is just flat not true. What the ruling did was first determine that the FCC was not required to rule that the “called party” was the “intended recipient” on the record before it. But then, after determining that the FCC’s one-call safe harbor could not be squared with its determination that a caller is permitted to reasonably rely on consent provided by a former subscriber, it set aside the FCC’s “called party” determination because that would impose strict liability for reassigned calls, which is a result that the Commission specifically stated it did not want to embrace. The key language appears at pages 39-40 of the opinion: “If we were to excise the Commission’s one-call safe harbor alone, that would leave in place the Commission’s interpretation that ‘called party’ refers to the new subscriber…We cannot be certain that the agency would have adopted that rule in the first instance…[and] as a result, we must set aside the Commission’s treatment of reassigned numbers [including its definition of called party] as a whole.” So, on remand, the issues to be addressed are: (1) who is the called party?; and (2) if it is still the subscriber, then to what extent may a caller reasonably rely on the consent of the former “called party”?

9. Consumers Can Revoke Their Consent by Any Reasonable Means—but Not “Creatively” and Not if Their Contract Says Otherwise!

While the revocation piece of the ACA Int’l ruling is big news, it is hardly surprising. Readers of this blog know that I have been saying for over a year now that contractual revocation clauses are enforceable. Sure enough, the D.C. Circuit affirms that “[n]othing in the Commission’s order [] should be understood to speak to parties’ ability to agree upon revocation procedures.” ACA Int’l at 43. More generally, the Court upholds the FCC’s determination that consumers can revoke consent using “reasonable” means. The D.C. Circuit articulates a totality-of-the-circumstances test. One factor to consider is “whether the caller could have implemented mechanisms to effectuate a requested revocation without incurring undue burdens.”Another is “whether the consumer had a reasonable expectation that he or she could effectively communicate his or her request…in that circumstance.” ACA Int’l at 41. One piece of the ruling that is sure to have industry buzzing is the suggestion that a call recipient’s decision not to take advantage of a reasonable revocation paradigm that is offered by the caller might be evidence that the revocation effort was not reasonable. In particular, the Court suggests that “creative” revocation efforts might not be permissible—a clear shot at the unfortunate tactic of some litigants who manufacture TCPA lawsuits by evading known opt-out mechanisms.

10. No Mention of the First Amendment or the Constitution Is Made in the Ruling.

While others may not find this surprising, I am actually shocked by the panel’s silence on constitutional issues. The TCPA has been subjected to strict scrutiny on five separate occasions now—this means that the statute is unconstitutional unless it is narrowly tailored to further a compelling governmental interest. But given the panel’s finding that the FCC Order literally expanded the TCPA to apply to every smartphone in the country and, alternatively, that any other reading of the Omnibus would fail to “articulate a comprehensible standard,” I don’t see how the statute passes strict scrutiny muster. The TCPA—as applied by the FCC—is necessarily either unconstitutionally overbroad, or unconstitutionally vague for want of any discernable scope.

Blue Cross Insurer May Reduce Obamacare Rates In Five States

Friday, March 2nd, 2018

One of the nation’s largest operators of Blue Cross and Blue Shield health insurance plans said it made more than $1 billion last year, which bodes well for purchasers of its individual coverage under the Affordable Care Act.
Health Care Service Corp. said it “earned $1.3 billion and grew membership by 315,000” on a range of policies it sells individuals, employers and small groups in five states. Health Care Service operates Blue Cross and Blue Shield plans in Illinois, Texas, Montana, Oklahoma and New Mexico.

The improving finances for Health Care Service, which in recent years had lost hundreds of millions of dollars on its individual business, now means some individual Obamacare customers in five states could see reduce rates . Health Care Service, which is a mutual insurer owned by policy holders, said it has “filed average rates for small group Affordable Care Act-aligned plans ranging from slight reductions to modest increases, effective July 1, 2018.” The insurer wouldn’t say which states would see lower rates.

“Final small group rates will be finalized in spring and may vary by customer,” Health Care Service said. “While individual rate filings have not been completed, preliminary analysis suggests relief for individual rates similar to what is filed for small group products, provided sensible market stabilization measures remain in place.”
As part of its announcement on improving profits of its Blue Cross plans, Health Care Service said it has “committed $1.5 billion over three years to accelerate its efforts to reduce health care costs for its members.” The effort includes investments to improve “collaborative care” relationships with medical providers and patients to improve health outcomes and invest more in digital and data technology.

“Over the last several years, we reduced our expenses, managed medical costs across the health care system and remained true to our commitment to stand with customers – even in tough market conditions when others wavered,” Health Care Service chief executive Paula Steiner said in a statement.

Health Care Service is the latest insurer to signal improving profits for business it offers under the ACA. Cigna and Centene are also seeing improved profits from their individual businesses even after gaining customers from insurers like Aetna and UnitedHealth Group that left the ACA’s exchanges after they couldn’t effectively manage the costs of sick patients buying individual policies.

For more information on healthcare, read Bruce Japsen’s book, Inside Obamacare: The Fix for America’s Health Care System

Collection Industry Requests Guidance from Mass AG Regarding Longstanding Interpretation of Validation Requirements

Friday, March 2nd, 2018

ACA International has asked the Massachusetts Attorney General to clarify whether third party debt collectors acting on behalf of original creditors are subject to the validation requirements set forth in 940 CMR 7.08.


Historically, third party collection agencies have operated in Massachusetts with the understanding that they are governed by regulations promulgated by the Division of Banks (209 CMR 18.00). Their clients (creditors) are not subject to rules of the Division of Banks, but are governed by the Attorney General regulations (940 CMR 7.00).
The current regulations were updated in 2012, and the definition of “creditor” was updated to include debt buyers. Specifically, 940 CMR 7.03 defines a creditor this way:

Creditor means any person and his or her agents, servants, employees, or attorneys engaged in collecting a debt owed or alleged to be owed to him or her by a debtor and shall also include a buyer of delinquent debt who hires a third party or an attorney to collect such debt provided, however, that a person shall not be deemed to be engaged in collecting a debt, for the purpose of 940 CMR 7.00, if his or her activities are solely for the purpose of serving legal process on another person in connection with the judicial enforcement of a debt.

When these changes were adopted, ACA International and its Northeast Chapter consulted with the Attorney General’s office and confirmed that the changes would not apply to third party debt collectors seeking to collect funds on behalf of the original creditors; they would only apply to debt buyers and the original creditors collecting their own accounts. In reliance on those assurances, the association informed its members that those who did not fall within the definition of a creditor or debt buyer (i.e. traditional third party agencies) were not subject to the regulations.

Under the FDCPA, a request for validation requires the agency to confirm that it is collecting the correct amount from the correct person. However, the statute is silent as to how that may be accomplished.

Verification of a debt involves nothing more than the debt collector confirming in writing that the amount being demanded is what the creditor is claiming is owed; the debt collector is not required to keep detailed files of the alleged debt. Chaudhry v. Gallerizzo, 174 F.3d 394 (4th Cir.1999).

The Massachusetts regulations (940 CMR 7.08) provide very specific and detailed requirements when validating a debt. These include, most significantly, providing copies of the documentation with the consumer’s signature and a ledger reflecting all payments, credits, balances and charges. While these requirements may seem reasonable on their face, this can create a substantial burden on an agency’s creditor clients, particularly in the case of small balance accounts or where the account has been in existence for many years. Often in these cases, the documentation required does not exist and does not fit this type of payment obligation. The regulations were aimed at large balance credit accounts such as mortgages and car loans where such documentation is routinely used and more easily accessible by the creditor or debt buyer; small balance accounts often do not have the same type of documents at the time the account is created. While the regulation allows for the possibility that the information might not exist, it still requires a diligent search and only after that is accomplished can the creditor continue collection.

The current issue

Creditors who do not believe that the regulations should apply may be reluctant or unwilling to provide the information required. Thus, agencies who request the information (particularly in light of the initial guidance provided when the definition was changed) may find themselves at a competitive disadvantage over agencies who are not asking their clients for this information.

The industry argues that traditional third party debt collectors are not agents in the legal sense of the word; they are independent contractors, and are not typically in a position to bind the principal through their actions. Consequently, the industry claims, the prior understanding as confirmed in 2012 is consistent with this definition.
In an effort to avoid further ambiguity and to assist its member agencies, ACA International has requested formal guidance on whether and to what extent the validation requirements in section 7.08 apply to third party debt collectors who are contractors and not lawful agents are required to comply with this rule.

BillingTree Healthcare Survey Reveals Top Challenges, Benefits of Technology

Friday, March 2nd, 2018

BillingTree, an ACA International member company, recently released the findings of its second annual Healthcare Operations and Technology Survey showing the impact of technology adoption in the industry, trends in patient payments and new challenges.

The report found a dramatic increase in the number of providers offering an interactive voice response (IVR) payment option for patients, up from 7 percent to 50 percent last year, according to a news release from BillingTree. Additionally, practices accepting patient responsibility payments via web portals increased from 67 percent to 75 percent.

The latest Healthcare Operations and Technology Survey was conducted over a one-month period in the last quarter of 2017 and now provides a healthcare industry benchmark. It found the biggest challenges facing providers were a patient’s inability to pay, collecting payments after leaving the facility, a lack of payment channels, compliance, and issues related to insurance billing.

Factors impacting a healthcare provider’s choice of payment provider included financial reporting and HIPAA compliance as the top two priorities. Compliance and integration were consistent with the previous survey results; the premium placed on reporting reflected a new trend.

Looking to the future, technology adoption continues to remain a key focus. Over the next 12 months, 63 percent of respondents plan to implement a patient payment portal – an increase of more than 40 percent compared to the previous year’s findings.

“Having collected healthcare industry data for two consecutive years, we can see significant trends starting to emerge. One key development is the priority placed on technology adoption,” Dave Yohe, BillingTree’s vice president of marketing said in the news release. “SMS and mobile payment offerings, like statements using QR Codes for fast mobile access to payment forms, are two emerging technologies also trending in the healthcare industry.”

-From ACA International

Consumer financial watchdog’s deputy director asks judge for injunction to replace Mick Mulvaney as acting chief

Thursday, December 7th, 2017

The deputy director of the Consumer Financial Protection Bureau is asking a federal judge for an injunction to install her as the agency’s acting chief in place of President Trump’s appointee, Mick Mulvaney.

The Wednesday night legal filing by Leandra English is the latest in the legal battle for control of the bureau and comes after U.S. District Judge Timothy J. Kelly denied her request last week for a temporary restraining order to remove Mulvaney.

Kelly did not rule on the merits of the case, which centers on a dispute over which statute governs the appointment of an acting director. English’s attorney, Deepak Gupta, had said his client planned to file for an injunction, which, unlike the restraining order, could be appealed if not granted.

“Ms. English has a clear legal entitlement to the position of Acting Director of the CFPB,” the filing said. She asked the court to declare her the lawful acting director and that any actions Mulvaney takes in the position “shall have no force or effect.”
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Kelly has set a hearing on the injunction for Dec. 22 in U.S. District Court for the District of Columbia.

The dispute began on Nov. 24 when Richard Cordray, a Democrat, stepped down as bureau director. He promoted English, his chief of staff, to deputy director and said she would serve as acting director under a provision of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act that created the bureau.

Within hours of Cordray’s resignation announcement, Trump appointed Mulvaney to fill the post under the Federal Vacancies Act of 1998. The administration said that law allowed Trump to appoint an official who already had been confirmed by the Senate in another capacity to also serve as the bureau’s acting director.

Mulvaney, the director of the White House Office of Management and Budget, has moved into Cordray’s office and acted quickly to put his stamp on the bureau despite protests from Democrats and consumer advocates. The bureau writes rules and enforces consumer protections against banks and other financial institutions.

A former Republican congressman and an outspoken bureau opponent, Mulvaney told reporters Monday that he expected to be in the job for five to seven months because a permanent director still must be nominated and then confirmed by the Senate.

English has been at the bureau’s headquarters “from time to time” and also has been working from another bureau office a few blocks away, Mulvaney said.

He said he has no intention of firing English, but said he has not met with her and does not plan to because of the legal dispute. Mulvaney said he has emailed her, asking that she “please cease holding yourself out as acting director.”

English has not responded to the emails, he said.

California Bill Changes How Debt Collectors Handle Identity Theft Disputes

Tuesday, August 30th, 2016

The bill reduces the time frame for debt collection companies to investigate identity theft disputes.

The California Assembly unanimously passed the Identity Theft Resolution Act Monday. The bill, which the California Association of Collectors supported, outlines how consumers must dispute a debt thought to be the result of identity theft and next steps for debt collection companies.

According to the California Assembly’s Legislative Counsel’s Digest, “Existing law requires a debt collector that receives a copy of a police report filed by the debtor alleging that the debtor is the victim of an identity theft crime and a written statement in which the debtor claims to be the victim of identity theft to cease collection activities until completion of a review.” The Identity Theft Resolution Act lists the specific information consumers must include in that written statement to the debt collection company in order to stop collections on a debt that’s not owed due to identity theft.

Once the debt collection company receives this information, it will have 10 business days to start an investigation of the dispute. If the company provided information about the debt to a credit reporting agency, it must let the CRA know the account is disputed. After concluding its review, the debt collection company must then send the results of its investigation to the consumer within 10 business days.

“The debt collector may recommence debt collection activities only upon making a good faith determination that the information does not establish that the debtor is not responsible for the specific debt in question,” the bill states.

The Act also forbids creditors from selling consumer debt to a third-party debt collector if the consumer is a victim of identity theft.

“Millions of Californians have fallen victim to identity theft, myself included,” said State Assemblymember Bill Dodd, who sponsored the bill, in a prepared statement to the press. “It’s an issue that transcends partisan politics, and that’s why my colleagues in the legislature voiced their unanimous support for this bill. Victims of identity theft deserve a transparent and speedy resolution process.”

The bill had previously passed the Assembly in a 74-0 vote, before being amended by the Senate, in May, ACA previously reported. Now that the version of the bill including Senate amendments has passed the Assembly, Gov. Jerry Brown is expected to sign it into law.

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Experts: Providers leaving money on the table by ignoring value-based programs

Wednesday, March 9th, 2016

Susan Morse – Providers may be pleasantly surprised by new payment models when they learn how much they would have been paid had they participated, according to Rene Cabral-Daniels, CEO of the Community Care Network of Virginia.

“Payments incentive provider behavior,” Cabral-Daniels said during a continuing symposium on the business of healthcare during HIMSS16. “There’s money left on the table from (using) fee-for-service. ‘Here’s what your check could have been.'”

Doctors are also leaving money behind by not effectively partnering in value-based models, she said.

Cabral-Daniels is the former general counsel attorney responsible for outpatient payment system oversight at the Centers of Medicare and Medicaid Services.

She now oversees Virginia’s only health center controlled network. The Family Health ACO is composed of federally qualified health centers that largely serve the underserved population.

A study has shown that people with the greatest healthcare needs receive the least amount of care, she said. The health centers are more likely to treat patients with chronic illnesses compared to other providers, costing the economy $1 trillion annually.

The payer mix is only 14 percent private insurance; Medicare 8 percent; Medicaid, 40 percent; and the uninsured, 36 percent.

Payment system reform has at its core, she said: a solid IT infrastructure; integrated care delivery across facilities; measured outcomes and costs; bundled payments for care coordination, expanded services across the geography; and organization of integrated practice units.

Cabral-Daniel’s talk focusing on accountable care organizations was part of a series. Earlier Rod Piechowski, senior director, Health Information Systems HIMSS North America shared reports from UnitedHealth Group that showed payments tied to value have tripled over three years to $36 billion in 2015; that number is expected to rise to $65 billion by the end of 2018, he said.

Anthem value-based spending will rise from $38 billion in 2014 to $65 billion in 2018, he said. Currently, about 30 percent of Anthem’s total health providers– approximately 40,000–are involved in value-based payment contracts.

Aetna has approximately $20 billion — about 30.6 percent of its total spending — tied to value-based contracts, with a goal to achieve 75 percent by the end of the decade.

Humana in 2014 paid $76.8 million to physicians participating in the Accountable Care Continuum Program, in addition to their normal reimbursements. This is a 28 percent increase from the $60 million paid to physicians in 2013.

Blue Cross Blue Shield Distinction Total Care estimated savings were over $840 million over traditional payment models on an annual basis. Payments represent approximately 20 percent of BCBS’s medical claims.