Dominic Jainy stands at the intersection of emerging technology and the fundamental systems that keep our society functioning. As a veteran IT professional with a deep specialization in artificial intelligence and blockchain, he has spent years observing how data connectivity serves as the invisible backbone of modern governance. However, the recent financial restructuring of the Multi-State Information Sharing and Analysis Center (MS-ISAC) has raised alarms for experts like Jainy, who see the withdrawal of federal support as a fracture in the nation’s collective shield. With decades of experience analyzing how decentralized networks protect against large-scale threats, he offers a sobering perspective on what happens when the vital flow of threat intelligence is choked by budgetary constraints. In this discussion, we explore the precarious state of municipal cybersecurity, the chilling effect of losing over ten thousand member jurisdictions, and the high-stakes reality where a local water outage is no longer just a technical failure, but a matter of national security.
The MS-ISAC recently saw a staggering 70% decrease in its membership after decades of federal support were abruptly withdrawn. How does such a massive exodus of local jurisdictions shift the security landscape for the average citizen who relies on these municipal services every day?
The departure of more than ten thousand local jurisdictions is not just a statistical anomaly; it is a fundamental degradation of the safety net that protects our daily lives. When you consider that the membership roster plummeted from 18,574 total members to just 5,618, you are looking at a massive blind spot that has suddenly opened up across the American landscape. For the average citizen, this means that the local police department, the neighborhood hospital, and even the school district are now operating without the real-time threat intelligence that once acted as an early warning system. Sarah Powazek from the UC Berkeley Center for Long-Term Cybersecurity hit the nail on the head when she noted that community security is national security. We aren’t just talking about stolen data; we are talking about a reality where the water stops flowing or public life grinds to a halt because a small town with a budget under $25 million couldn’t afford the new membership fees. It creates a jagged, uneven landscape of protection where your digital safety depends entirely on whether your specific county can squeeze a few extra dollars out of an already depleted treasury.
With states like Washington losing access for nearly 500 local entities, we are witnessing the rapid creation of “information silos.” From your perspective as a technology expert, what happens to the collective defense of the country when these shared operating pictures disappear?
The beauty of the MS-ISAC was its ability to provide a “shared operating picture,” a concept Vickie Sheehan in Washington emphasized as vital for state-wide resilience. When those 500 local entities are forced to go dark due to budget deficits, the collective intelligence of the entire network suffers because we lose the telemetry that those entities once provided. The MS-ISAC currently collects data from roughly 400,000 endpoint security devices and nearly 1,100 intrusion-detection sensors, but those numbers are dipping as jurisdictions offboard. In cybersecurity, we rely on the “herd effect”—the more sensors we have in the field, the faster we can identify a new ransomware strain or a nation-state intrusion. By creating these silos, we are essentially allowing adversaries to pick off smaller, isolated targets one by one without the rest of the community even realizing a campaign is underway. It turns a coordinated national defense into a series of lonely, desperate skirmishes where local IT directors are forced to guess at threats that were once clearly flagged by a central authority.
To compensate for a tighter budget, the Center for Internet Security has pivoted toward automation and self-guided portals rather than human-led outreach. Do you believe these technological shifts can truly replace the human-led welcome sessions and personal engagement that used to define the ISAC?
While automation is a powerful tool in my field of expertise, there is a dangerous “uncanny valley” in cybersecurity where a lack of human engagement leads to a loss of trust and implementation. John Gilligan, the CEO of CIS, mentioned that they are putting a lot more emphasis on automation because they simply do not have the staff to perform traditional outreach anymore. However, for a small “tier one” jurisdiction—perhaps a rural library system or a small-town police precinct—a self-guided portal can feel incredibly daunting and impersonal. We are seeing a shift where the onboarding process is now a lonely walk through a digital portal rather than a collaborative session with an expert who understands the unique pressures of local government. Automation can certainly help process the alerts from those 1,100 sensors, but it cannot replace the human intuition required to help a local official understand why a specific alert matters to their community. If we lose the human element, we risk having the remaining members ignore the very intelligence they are paying to receive because it feels like just another automated notification in an already crowded inbox.
Nations like China and Iran are increasingly using cyberattacks as instruments of foreign policy, targeting critical infrastructure. How does the current withdrawal of federal funding for local threat-sharing conflict with the growing sophistication of these state-sponsored adversaries?
There is a profound and worrying disconnect between the rising geopolitical temperature and the federal government’s decision to pull back from the MS-ISAC. At a time when Samir Jain of the Center for Democracy and Technology warns that the threat environment is poised to accelerate, we are seeing the federal government dramatically retreat from its traditional responsibilities. China and Iran do not view a small-town water utility as an insignificant target; they view it as a point of leverage to cause regional instability and fear. When the MS-ISAC lost its federal subsidies, it forced organizations to treat cybersecurity as a discretionary expense rather than a core component of national defense. This is a gift to foreign adversaries who specialize in finding the weakest link in the chain, and right now, that link is a local jurisdiction that had to choose between funding trash collection and paying for threat intelligence. It is a strategic retreat at the exact moment we should be reinforcing our digital borders with every resource at our disposal.
Beyond the immediate technical risks, there are significant economic hurdles, such as the difficulty in maintaining affordable cyber insurance without ISAC membership. What are the long-term economic repercussions for a city that can no longer afford these protections?
The economic fallout of this funding cut is a looming disaster that extends far beyond the IT department. John Matelski pointed out that insurers heavily weight factors like ISAC membership and access to third-party incident-response support when determining premiums and payouts. If a city leaves the MS-ISAC to save money on membership fees, they may find themselves uninsurable or facing premiums that are ten times higher than their original “savings.” We are looking at a potential cycle of poverty where a cyberattack hits an unprotected town, the insurance company denies the claim because the town lacked proper threat-sharing protocols, and the local government is forced to hike taxes or cut essential services to pay for the recovery. Currently, only 254 out of 1,592 “tier one” jurisdictions are receiving subsidies or discounted rates from CIS, which leaves over a thousand small entities walking an economic tightrope. This isn’t just a big-versus-small issue; it’s a systemic financial risk that could lead to local bankruptcies in the wake of a major ransomware event.
What is your forecast for the future of state and local cybersecurity in the wake of this funding crisis?
The upcoming months will be a pivotal test for the “whole-of-state” model, especially as new annual budgets take effect on July 1st across many states. My forecast is that we will see a widening “cyber-divide” where wealthy states that can afford to subsidize their localities, like the 15 states currently paying for all their organizations, will remain relatively resilient, while others will fall into a state of chronic vulnerability. We will likely see more legislative efforts, such as the bill drafted by Senator Mark Warner, attempting to force the government to resume funding because the current trajectory is simply unsustainable. CIS is hoping for stability by the end of 2025, but that stability is contingent on states recognizing that they cannot tackle cyber defense alone, as Colin Ahern from New York so aptly stated. If the federal government does not step back in, we are going to see a patchwork of security that invites more frequent and more devastating attacks on the essential services that keep American life moving. The cost of inaction today will be paid in the chaos of tomorrow’s outages and the erosion of public trust in our digital infrastructure.