What Silicon Valley Pundits Dont

7/24/2019 What Silicon Valley Pundits Dont

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What silicon valley pundits don't get about FB's free

basics and TRAI

Originally posted on Medium.

Yesterday, Marc Andreessengot into trouble for saying Indias anti-colonial

sentiments had held its economy back. He did not mean colonialism is good, give

him a break.

What was far more troubling and got less flak was his comment that Indias

interpretation of net neutrality was immoral and the country should be ok with

a bad growth plan for mobile internet because, you know, poor people.

Heres the underlying fault in this perspectivehe assumes that Facebooks FreeBasics is as good as it's going to get for the 75% of India yet to come online.

FALSE.

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2/20

offering it for free but then walling in the platform to only showcase their own

What TRAIand activists in Indiastood up for was to ask telcos and leading

internet companies to do better. Not do nothing, but to do better. And

TRAI (Im quite proud of them for this) understood that if they wanted internet

access to grow sustainably in India, rather than in a haphazard, damaged way,

they needed to make Airtel and Facebook (and everyone else) come back with a

much better strategy on how they were going to invest in this market without

creating multiple walled gardens of free, unsustainable access to a few websites.

What would go wrong if Free Basics operated in its current form?

What Facebook (and Silicon Valley pundits) probably imagine is 500M poor

people using Free Basicsa partnership between Reliance Communications

and Facebook to better their lives. But that was never going to happen. Reliance is

losing subscribers rapidly and no other telco was joining this platform. Airtel

(Indias leading telco) was launching its own zero rating (Airtel Zero) with

Flipkart. Vodafone has its own plans, probably trying to partner with Google

(Vodafone is testing launch in Kenya and politely declined to share plans before

the TRAI ruling in India).

So what you wouldve had by June 2016 is 7 different free internet

platforms offered by telcos trying to stay competitive with different technical

stacks and bad user experience for the startups trying to get on them as well as

customers.

Yes, this fragmented, limited free internet would still be better than the market

not growing at all (this is the argument made by the other side of this debate), but

who says thats the only alternative!! When did free or nothing become the

premise of this debate?





3/20

Written by

How did we get to 1.1B mobile subscribers?

Telecoms and content companies together invested in growing the market with alot of competition and innovation to bring price points low enough that most

people could afford it. The average monthly spend of these 1.1 billion

users on their mobile plan is $1.5. Not free, but affordable.

TRAI made sure that the competition was healthy and introduced regulations like

mobile number portability to protect consumer choice. Companies came up with

marketing plans that offered free talk time to users as an incentive to use more

mobile services. It worked brilliantly. And consumers could use the talk time to

do whatever they wanted. We already see Airtel testing the waters herewith free

mobile internet starter packs and Facebooks planning to grow its Express Wifi

platform.

So heres what telcos and internet giants (as well as Twitter pundits) need to take

away from TRAIs decisions to implement net neutrality in India launch

platforms and offers that give people access to all of the internet

within their budget.

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Mahesh BandakkaMahesh Bandakka

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4/20

America Is Enabling Tax Evasion

The combination of increasing inequality and anemic economic growth has

thrown a political spotlight on tax havens. Research has shown that governments

are losing at least $200 billion in potential tax dollars every year because of them.

Politicians throughout the world are feeling pressure to address this perceived

injustice.

Consider, for example, Democratic presidential candidate Hillary Clintons recent

commentsabout companies routing income through the Bahamas or the

Cayman Islands or wherever in an effort to minimize or avoid taxes. Clinton

would like America to capture lost tax revenues from corporations booking profits

in their offshore subsidiaries.

My guess is that your image of tax havens, like Clintons, is a small island with

free-flowing rum and sun-kissed, care-free locals. You may remember The Firm,

the 1993 film based on the John Grisham thriller, in which Tom Cruise plays a

lawyer who gets mixed up with a firm that helps clients launder money through

the Cayman Islands.

favouring the net neutrality and not giving in for greed of few businessfavouring the net neutrality and not giving in for greed of few business

LikeLike(1)(1) ReplyReply 3 hours ago3 hours ago

Sandhya HegdeSandhya Hegde

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5/20

especially comparedto other jurisdictions. The territory now complies with

about foreign account holders to their home countries. Further, anonymous

corporations in which ultimate ownership is unknown no longer exist in Cayman:

it has collected beneficial ownership information about corporations set up under

its jurisdiction for fifteen years. Preventing the existence of anonymous shell

corporations makes it more difficult for individuals and firms to hide taxable

income from authorities.

Ironically, there is strong evidence that some of the most egregious tax havens are

more like the country Secretary Clinton hopes to lead than the islands she

highlighted. In fact, major OECD countries are guilty of doing exactly what these

more notorious havens once did. In a 2009 audit studypublished in theJournal

of Economic Perspectives, a researcher attempted to set up anonymous shell

corporations using 45 different firms across 22 different countries. More than

75% of firms in OECD countries agreed to set up anonymous shell corporations,

compared with less than 15% of firms in the traditional tax havens. That's right,

it's probably easier to set up an anonymous corporation in the US than in the

Cayman Islands.

A recentBloomberg reportdescribed how the United States in particular has

become "effectively the biggest tax haven in the world," with the global rich

moving their offshore funds from the Bahamas and the British Virgin Islands to

Nevada, Wyoming, and South Dakota. The reason? These American states allow

anonymous bank accounts. Further, the US has refused to sign on to the OECDs

new standards that would require American financial firms to disclose accounts

held by foreigners to their home countries. This comes off as hypocritical to much

of the world, because the US through FATCArequires other countries to do

provide information about foreign accounts owned by Americans.

Anonymous banking facilitates crime and corruption. The UN estimatesthat

between two and five percent of global GDP is laundered every year. A recent 60

Minutesreport demonstrated how the US facilitates these illegal financial flows.





6/20

Written by

The show recounted how

employee undercover as a representative of a corrupt African politician to seek

The nonprofit arranged 16 face-to-face meetings with New York lawyers

including the then-head of the American Bar Association and only oneoutright

refused to help. As Charmian Gooch, the head of Global Witness, pointed out, US

law requires bankers to report such requests, but it does not require lawyers to do

the same.

The real problem, former Senator Carl Levin pointed out, is that US law does not

demand disclosure of beneficial ownership of new corporations, a practice that

has become standard in places like the Cayman Islands. The American Bar

Association, he pointed out, has been a particularly vigorous opponent of this.

The result: it is easier to set up an anonymous corporation in the US than it is in

traditional tax havens.

As the US presidential elections move forward, if candidates want to criticize

traditional tax havens and avoid hypocrisy, they better start taking a cold, hard

look at their home turf.

Vikram Mansharamaniis a Lecturer at Yale University in the Program on

Ethics, Politics, & Economics. He is the author of BOOMBUSTOLOGY: Spotting

Financial Bubbles Before They Burst(Wiley, 2011). Visit his websitefor more

information or to subscribe to his mailing list. He can also be followed on

Twitteror by liking his Page on Facebook.

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What Silicon Valley Pundits Dont