Tag Archives: Global Networks

The State of Free Speech in the U.S: Online

                                                                                                  Above: The Internet

As the internet ages from its non-contentious infancy to a raucous and tumultuous adolescence, it finds itself increasingly in a headlock with its parent, the U.S Feds. The interwebs is engaged in a fight for its soul, pitted between its trailblazing, fringe-following roots and a more dignified, prominent, and sanitized position on the public stage. Already the fallout from this teenage train wreck includes an exiled online mogul, an online “hit list,” a string of highly controversial court cases, and a hot regulatory mess.                                                                                  The Electronic Communications Privacy Act of 1986 was originally written to curtail government wire-tapping of telephones and related electronic media available in the 1980’s. Though the law has been amended to incorporate regulation of government digital communications snooping, it is outdated. One provision in particular, regarding emails is quite worrisome. It considers emails that have been stored on a third party (usually the email service provider) server is considered abandoned after 180 days, which allows law enforcement agencies to retrieve such “abandoned” emails without warrant.                                                                It’s no secret to many American internet users that internet access in the good ol’ U.S.A. is significantly slower and more expensive than it is for European and Oriental counterparts. The Open Technology Institute documented American internet access in its 2014 report The Cost of Connectivity. Going through one chart provided in that report reveals that the median cost of a 30 Mbps broadband connection in Europe costs $42.59 while it costs $54.97 in the U.S. Another interesting finding that emerges in the report is the preponderance of small U.S. cities that claim the highest-speed internet connections whereas the European and Asian markets are dominated by the world cities.                                                                                                                          Shielded by the innocuous “Net Neutrality” label, the Federal Communication Commission quietly re-classified broadband access as a telecommunications service (Feb. 26, 2015), thus, subjecting internet service providers (ISPs) to Title II of the Communications Act of 1934. The change in law was adopted by executive action taken by the FCC. Ostensibly, the new rules are supposed to force ISPs to treat all online exchanges equally with regard to speed of service. In reality, however, the rules discourage and disincentivize ISPs from investing in expanding and improving their capabilities all while setting dangerous legal precedents for government intervention in supposedly “free” media. The basics of the rule include the prohibition on ISPs from blocking content that competes with the provider’s business, the mandate that ISPs cannot reduce the speed of certain applications (known as “throttling”), the ban on accepting fees for increased-speed connections, and it bans the ISP from blocking any lawful content. Sounds like a lot of hypocrisy coming from the Executive Branch of the Federal government.

Megaupload Scandal                                  Above: Kim Dotcom (center)

In January of 2012, the U.S government shutdown the popular file-sharing website, Megaupload. The hosting service was seized and criminal cases against the owners, chief among them Kim Dotcom, opened. Within days, other jurisdictions had frozen Megaupload’s assets. Megaupload.com and associated website  (Megaporn, Megalive, and Megavideo to name a few) were hugely popular file-sharing websites. Basically, users were able to upload and share files of content ranging from movies to software to anything else imaginable.                                  Before the Department of Justice shutdown Megaupload on charges of copyright infringement, the company was registered in Hong Kong and run by a group of U.S non-citizens. At its peak, the site was reported to host 50 million users a day and a full 4% of all internet traffic. Kim and his companions (Finn Batato, Mathias Ortmann, and Bram van der Kolk) were made wealthy from the site’s ad revenue.                                                                                                            Megaupload derived its revenue primarily from online advertising and premium subscriptions, which allowed paying members to download, upload, and store files with practically no restrictions. Non-paying registered members, had the ability to download and upload any files available to them, but if an uploaded file was not downloaded by anyone within 90 days, the file was deleted. Non-registered users (‘non-members) had the ability to upload and download any files that were available on the website but any uploaded file that wasn’t downloaded by anyone within 21 days was to be deleted from the website.                                                The substantiation of the DOJ’s claims are quite flimsy and far-fetched. In the indictment papers filed by the Government of the United States, Kim Dotcom, Megaupload LT., Vestor LT., Finn Batato, Julius Bencko, Sven Echternach, Mathias Ortmann, Andrus Nomm, and Bram van der Kolk were charged on the following counts:

1.) Conspiracy to Commit Racketeering

2.) Conspiracy to Commit Copyright Infringement

3.) Conspiracy to Commit Money Laundering

4.) Criminal Copyright Infringement by Distributing a Copyrighted Work Being Prepared for              Commercial Distribution on a Computer Network & Aiding and Abetting of Criminal                        Copyright Infringement

5.) Criminal Copyright Infringement by Electronic Means & Aiding and Abetting of Criminal                Copyright Infringement

The document opens with demagoguery that would put Big Brother to shame, claiming that the defendants were part of a worldwide online criminal organization, dubbed the “Mega Conspiracy.” According to a court ruling that would proceed from this case, the fact that Mega removed copyrighted files on their “Top 100” list constitutes a careful and deliberate attempt to make their site appear more legitimate, when, in reality the website was fully aware and complacent with the copyright infringement. Besides the fact that its ludicrous to expect a small company like Mega to police and filter a site of the size of Megaupload, under current law there are no provisions for secondary copyright infringement. On top of that, according to provisions of the Electronic Communications Privacy Act of 1986 extended by the Stored Communications Act private companies are forbidden from actively probing the private information of user accounts.                                                                                                                                                                      What’s more frightening is the fact that most of the assets that were seized by the U.S government were not in the U.S. The ruling justifies this since part of the “conspiracy” was carried out in the states.                                                                                                                                           Megaupload was, ostensibly, a “private data storage provider,” a website that provided uploaders with server space to store files. The basic file-sharing directive of Megaupload was akin to other programs such as Microsoft’s SkyDrive or Google’s Drive. Granted, there are some key difference between Megupload’s model and those of the services mentioned but the basic idea, the uploading and sharing of private content files.                                                                                   The prosecution argued that the website incentivized piracy through its Uploader Rewards Program, which offered premium subscribers cash awards for uploading files to the website. At the heart of this nefarious plot, was Mega’s aim to provide pirated content to increase the number downloads by unregistered users, which would generate more ad revenue for the website. Really? If shameless business profit-motivation is a crime, then there are a lot of businesses in dire need of a federal raid.                                                                                                             It is troubling when the United States DOJ and a host of other governments (including New Zealand and Hong Kong) can shut down a popular website, exiled its founders, and impound their funds because of the abuses of a few, rogue 3rd parties.   

The Backlash                                                                                                                                                                                            Above: Declaration of Internet Freedom                                                                                                                                                                                                                                                                                       The reaction to authoritarian attempts on the integrity of the internet has been neither small nor obscure. Nor has the response been dominated by any one sector of the internet-using society. One of the forces on the front lines in the fight for internet openess is that all-consuming corporate behemoth: Google.                                                                                                          Specifically, it is Google’s Transparency Report that tracks and reports information about requests the company receives to remove content, filtering of google services, and malware warnings the company issues to users of its search engine. The website is very specific, allowing you to look at the government requests it receives to remove content and the reasons cited by those governments. It also reports requests to remove content from non-governmental organizations or individuals and gives the location of that request, the date of the request, and the outcome.                                                                                                                                                            Part of the information that Google reports is the data regarding the requests it receives from law enforcement agencies for information about its users. You can even explore the percentage of emails sent to and from gmail accounts that were encrypted (i.e private and protected from snooping). The data is all arranged in an easy-to-understand, user-friendly fashion such that even a 19th-century ludite could understand it. Not only does Google provide the raw data of these activities, but it explains the reasoning behind its response to requests, the way in which encryption works, and its own efforts to improve internet transparency/ security. The Transparency Report even maintains a list of other groups with a significant online presence that disclose government requests they receive for content takedown which include: AT&T, Apple, Microsoft, Time Warner Cable, AOL, Facebook, LinkedIn, Yahoo!, Snapchat, Comcast, WordPress, Twitter, Wikimedia Foundation, and The University of California at Berkeley.

                                                                                  Above: Herdict

Another online effort in the tight for internet transparency comes from Harvard University’s Berkman Center. That project, known as Herdict, allows registered users to independently test and report webpages’ accessibility. As its name suggests (a portmanteau of “herd” and “verdict”), the website gathers data from a myriad of users to locate websites and pages that may be inaccessible due to government censorship, DOS Attacks, or other types of outages. The tool is helpful in finding choke points across the world wide web and then reporting the data for all to access.

               Above: OpenNet Initiative

A project aimed at  and reporting internet filtering and surveillance, the OpenNet Initiative is a collaboration of the Citizen Lab at the Munk School of Global Affairs, the Berkman Center for Internet & Society, and the SecDev Group. The group maintains a map of general internet filtering by country and even breaks down the filtering into the categories of the content filtered.

                                                          Above: The Internet Party

The brainchild of exiled internet mogul Kim Dotcom, the Internet Party is an upstart New Zealand political party with a decidedly open source-progressive alignment. The party believes in the power of competition and innovation and makes no exceptions for government policy. The website even has its own “policy incubator” whereby party members can discuss and formulate the party platform and policy stances, a refreshingly open approach to politics. The group is only a little more than a year old (May 13, 2014) but it promises to attract large masses with its mission to bring cheap, high-speed internet to all New Zealanders (something desperately needed in the U.S) and dedication to reform of copyright law. The group has a host of other forward-thinking ideas including the decriminalization of marijuana and a review of the Trans-Pacific Partnership.

                                                        Above: The Internet Freedom Coalition

As outlined on their website, the Internet Freedom Coalition is dedicated to protecting the freeing and democratizing effect the internet has on information and opposes three main threats to this freedom: taxes, regulations, and any attempt by the U.N. to regulate the internet. As of late the organization has taken up the fight against the recent Net Neutrality measures instituted by the FCC.                                                                                                                                        In a rare act of good statesmanship, the U.S House of Representatives has voted to approve the Permanent Internet Tax Freedom Act. Though still a bill on capitol hill, if signed into law, this legislation would indefinitely extend the moratorium on internet taxation, first enacted with the Internet Tax Freedom Act of 1998. Such a law would exempt the internet and companies that provide access to it from bandwith, email, and bit taxes as well as extending protections of e-commerce from multiple taxation.                                                                                                                   While the internet faces a myriad of challenges and threats from all sides, the good fight is far from over and the internet may as yet continue on in its innovative, democratizing ways.

A Brief History of Tax Havens

                                                                                                       Above: CCP Inc.

For as long as there have been unscrupulous governments levying taxes, there have been savvy people finding ways to avoid paying them. The emergence and continued existence of tax havens in direct defiance of onerous and unjust taxes continues to serve as a catalyst for economic as well as political, social, and ethical reform. It can be said that tax havens and, for that matter, any sort of “enclave of freedom” provide the only true competition to the conventional model of government. Such entities promote human progress and are a source of social innovation.

Ancient World                                                                                                                                                                                                                                               Above: Athenian Acropolis

It is a documented historical fact that the government of Ancient Athens imposed a 2% ad valorem duty tax at the city-state’s principal port. Athens was far from the only ancient polity that engaged in such taxation of trade; other city-states engaged in the practice include Halicarnassus, Cyprarissiae, Delos, Epidaurus, and Troezen. Governments even began experimenting with and implementing protective measures. The princes who ruled over Bosporus even levied a 3 .33% export tariff on all corn produced in the kingdom, unless the produce was destined for Athens, in which case the rate was reduced to 1.66%.                                    Then as now, certain statesmen and people responded to the authoritarian imposition of such measures on them and other average citizens. In Athens’ case, small nearby islands “offshore” from the Peloponnese, became the preferred ports-of-entry for traders, looking to avoid the tax. Over time, even the Athenian bureaucracy responded to the force of market competition. Thucydides writes that in 413 B.C., Athens phased out its 5% import and export duty in tributary ports “because they believed in this way they would increase their revenue.”

Medieval & Modern World                                                                                                                                                                                                                         Above: City of London Corporation            

With the chaos wrought by the fall of the Roman Empire, sanctuary cities, providing individuals as well as organizations, asylum from a variety of different threats fostered a European tradition for increasing trade and political liberalization that would only be realized later. In analyzing the history of the tax havens an interesting trend appears; it seems that medieval and contemporary tax havens have their roots in the English Common Law tradition. Perhaps the star of the modern tax avoidance/protest movement is the 1.2 square miles governed by the City of London Corporation.                                                                                                                                This fascinating organization, shrouded in rite and a wealth of traditions including its Freedom of the City ceremony, traces its legacy of autonomy to its 12th century establishment as a commune and 1191 recognition by Prince John. The city was given special protections including the right to elect its own mayor in the 1215 Magna Carta. The City of London’s history has been joined at the hip with the development of livery companies. Descended from medieval guilds, livery companies today operate as trade associations for a wide variety of professions. Most livery companies carry the title “Worshipful Company of [profession or cause].”                          In addition to providing fodder for conspiracy theorists, the City of London’s 110 livery companies provide a great networking function within their respective professions, champion various philanthropic causes, enforce a professional code in their fields, award professional qualifications, etc. Of course, some of these functions vary according to the livery company, but overall the core functions remain the same. Importantly, the City of London enfranchises the business electorate. How this works, essentially, is that any incorporated or unincorporated business or organization whose premises are located within the city may appoint a number of voters based on the labor force they employ. In addition, the senior members of the liveries, the “liverymen”, sit on a council named the Council Hall, which chooses the Lord Mayor of the City, sheriffs, and other government positions.                                                                                                          As already mentioned, the city plays host to a large number of significant financial institutions including the Bank of England, London Stock Exchange, and Lloyd’s of London as well as offices of over 500 banks. In total, the City of London accounted for 2.4% of U.K GDP in 2009. There are some claims that the City of London effectively operates as a tax haven for foreign multinational companies, shielding businesses under investigation for fraud. Such accusations border on the realm of preposterous. What is clear, though, is that the City’s tradition of secrecy, autonomy, and sanctuary seem to have been picked up by crown dependencies the world over.                                                                                                                                                                                                                                                                                                                   Above: The South Sea Bubble : A Scene In Change Alley 1720

Founded in 1711, the South Sea company was a joint-stock company created as a way to consolidate and ultimately reduce the British government’s debt. Basically, the company’s business model was to attract investors who would pay off a government IOU in exchange for exclusive trading rights in the South Seas. The venture rested on the speculation that new markets for British goods would emerge in Latin America, opening up new silver and gold markets to the company and its private, British investors. Faster than you can say “Ponzi Scheme”, people were flocking to the South Seas Company, astronomically overvaluing the price of the stocks. The pioneering spirit embedded in the business plan of the company became a sensation. Soon, schemes promising to invest in everything from “floating mansions” to “sunlight reclamation from plants” sprouted up across Great Britain.                                                  When the leaders of the South Sea Company finally realized that the company’s stocks were vastly overpriced relative to the company’s actual earnings and value, they sold their own shares in the business. When news broke out of their sales, a mad frenzy of investors selling off their shares in the company ensued. The market would’ve completely crashed had it not been for the banking prowess of the British Empire.                                                                                                 Perhaps the most enduring legacy of the South Sea Bubble was not the lesson in investing (Can you spell, Bernie Madoff?) but the Bubble Act of 1720 which effectively forbade the formation of all join-stock companies not approved by the royal charter. Throughout the British Empire, new rules and restrictive regulations relating to business incorporation were enacted. Until the law’s repeal in 1835, rates of incorporation were considerably lower throughout British domains than they had been previously. In the late 19th century, the cash-strapped states of New Jersey and Delaware began reforming these laws and began attracting out-of-state businessmen, seeking to incorporate in these “havens”, in droves.

                                                                                           Above: Egyptian Delta Land & Investment Co.

The 1929 British court case Egyptian Delta Land and Investment Co. Ltd. vs. Todd  was a landmark development in the creation of modern-day tax havens. The dispute arose over the issue of taxation as related to a corporation’s location(s). The Egyptian Delta Land and Investment Company though legally incorporated in London, was headquartered in Cairo and operated in Egypt. Essentially, the court ruled that the company was exempted from paying British taxes because it did not operate in the UK. This case set the precedent for offshore business incorporation and the nervous governments that try to counteract it. Years later, various British and former British holdings exploited and tweaked this ruling in their own laws including the Bermuda, The Bahamas, and Cayman Islands. Bermuda, in particular, would prove to be an early pioneer of the modern tax-haven.

                          Above: Conyers Dill & Pearman

Bermuda traces its history as an offshore destination to, you guessed it, a bunch of lawyers, specifically, the law firm Conyers Dill & Pearman. In 1935, firm’s founder Reginald Conyers drafted Bermuda’s first  “exempt company” legislation, birthing what some consider the first modern tax shelter. The law’s language specifically addressed “exempt companies,” laying the foundations of the modern-day offshore business craze. Today, the firm works in various offshore financial centers such as the British Virgin Is., Cayman Is., and Mauritius.                                  Around the same time in Switzerland, the Federal Act on Banks and Savings Banks was enacted (1934), offered banks strong protections of privacy. Article 47 of the document (known colloquially as the Swiss Banking Act of 1934), enshrines the concept of absolute professional secrecy. In other words, any inquiry into any account held in Swiss banks is considered a criminal offense. The law restricted access to information about private holdings in Swiss banks to any government, including the Swiss. Exemptions can be made in the case of Swiss judge’s subpoena, or investigation of terrorist-related funds. In addition to the national legislation, the laws of numerous Swiss cantons were written to extend various business and financial protections to individuals and organizations.                                                                                                    Following on the heels of the First World War, Lichtenstein passed the Lichtenstein Persons and Companies Act in 1926. The law, along with subsequent laws in 1928, relaxed and streamlined Lichtenstein’s incorporation rules; made Lichtenstein the only continental European country to have a codified Trust Law; and extended privacy protections to foreign holdings in the country. The law also introduced a vast repertoire of incorporation types to the Lichtensteiner legal system. As a result, the mostly poor and agrarian economy that had been ruined by the First World War was transformed almost overnight into a modern economy, focused on financial services. The growth was precipitated by the vast influx of domiciliary and holding companies in the 20’s and 30’s. The 1926 law, combined with Lichtenstein’s maximum business tax rate of 20% and open border agreement with Switzerland, have made Lichtenstein an attractive and wealthy offshore center.                                                                                                        Following the 1950’s, the 20th century saw a huge proliferation in the number of tax havens worldwide including every type of municipality from Pacific island nations, to the Irish Financial Services Centre in the heart of Dublin, Ireland. In recent years, the OECD (Organization for Economic Co-operation & Development) which is anchored by representatives from high-tax developed nations, has been aggressive in their attacks on tax havens and offshore financial centers. Recently, the Swiss signed an OECD treaty ensuring the exchange of tax information in certain instances. This comes off the heels of prior Austrian and Luxembourgish concessions.

Looking Forward                                                                                                                                                                                                                                   Above: The Seasteading Institute

While there are many aspects of tax havens and their development that I have left out of this article (perhaps it will be fodder for a future post), I think the most interesting is the prospect offered by seasteading. Essentially, seasteading is a movement by a small but dedicated group of libertarians and anarchists committed to offering citizens of the world alternatives to traditional government. Essentially, a seastead is a site located in international waters, beyond the EEZ of existing land-based nations, on which people can dwell. The seasteads can be joined to one another and disconnected as needed. The concept is that people will form voluntary associations rather than have a governmental entity imposed upon them. The belief is that by subjecting social governance to the same competitive forces that power the market, human creativity will be unhindered, unleashing the beneficial powers of technology and social innovation.                                                                                                                                                               Currently, The Seasteading Institute is directing its recruiting efforts towards fulfilling what it calls The Eight Great Moral Imperatives: “Cure the Sick”, “Enrich the Poor”, “Feed the Hungry”, “Clean the Atmosphere”, “Live in Balance with Nature”, “The Velella Mariculture Research Project”, “Power the World”, and “Stop Fighting”. The group hopes to achieve all this by engaging the ingenuity of its supporters and the freedom offered by the absence of government to achieve technological breakthroughs that will better humankind. Does this sound like a crazy, utopian pipe dream? Maybe, but it sure is a noble pursuit.

In closing, I’ll leave you with the following thought. In order to create a more just and prosperous future and ensure the continuing of human flourishing, we as the human race must move towards a model of social organization that subjects these institutions to the forces of competition and creative destruction led by the choices of individual actors.

 

Neocolonial Organizations Introduction

 Above: Map of European Neocolonial Organizations

While the glory days of Europe’s great colonial empires is long past, the influence of post-colonial unions or associations of former colonies remains a significant yet under-appreciated. While given relatively little attention, these organizations form significant trade networks, philanthropic channels, language blocs, and zones of cultural diffusion. First of all, here is an as-of-yet incomplete map of these organizations. Not show here is the Dutch Language Union, whose sole purpose and mission is preservation of the Dutch language.

Commonwealth of Nations                                                                                           

The Commonwealth of Nations, an association of Great Britain’s former colonies created in 1931, is comprised of 53 member countries spanning 6 different continents and Oceania that account for roughly 1/3 of the world’s population, 1/5 of its trade, and 1/4 of its land area. Status as a member of the Commonwealth is not simply an honorific title; member countries interact through the various commonwealth organizations such as the Association of Commonwealth Universities (ACU), Commonwealth Association of Architects (CAA), Commonwealth Business Council (CBC), and Commonwealth Medical Trust (Commat). The organizational structure resembles that of the U.N, minus the security council. There is no formal trading bloc formed by the Commonwealth, but research suggests that trade between commonwealth countries is significantly greater than that between a commonwealth and a non-commonwealth neighbor. The Commonwealth has promoted a number of now-ubiquitous traditions across its member states: the Queen of England is the official head of state for most Commonwealth members; the multi-sport Commonwealth Games are held every four years; and every 2nd Monday of March Commonwealth Day officially commemorates the organization.

Community of Portuguese Language Countries   

The Community of Portuguese Language Countries (CPLC), founded in 1996,  consists of 9 full members, 2 associate observer states, and a plethora of interested nations. The CPLC nations cover roughly 4.15 million sq mi and are home to upwards of 240 million people. The core branches of the CPLC are the The Conference of Heads of State and Government, The Council of Ministers, The Standing Committee for Consultation, and The Executive Secretariat. The primary aims of the CPLC are mostly diplomatic, linguistic, and research-oriented. Other organizations include the Association for Portuguese Language Universities, Community of Portuguese Language Medicine, and The Union of Portuguese Language Lawyers.

The International Organization of the Francophonie                          

The Francophonie, founded in 1970, is currently composed of 57 member states with various membership statuses. The Francophonie represents roughly 890 million people, 19% of world trade, and 11 million sq mi on 5 continents and Oceania. The Francophonie relies on five core agencies to carry out its operations. These agencies include Association of Francophone Universities (AUF), TV5Monde, Senghor University of Alexandria, and International Association of French-Speaking Mayors. The Francophonie has been behind numerous conflict resolutions, economic development campaigns, philanthropic pursuits, and cultural preservation projects.

Commonwealth of Independent States    

The Commonwealth of Independent States (CIS) is a union of 11 former Soviet Republics, including 9 full member states and 2 participant states. The CIS is primarily focused on promoting free trade and political stability in the region. As of late, there have been serious efforts to promote the standardization of the Russian language among member states. The organization also developed and implemented a regional free trade agreement, CISFTA, forming a new trading block and common market. Additionally, the organization is responsible for the development of a NATO-like treaty among member states, CSTO. Both CISFTA and CSTO face tenuous futures. Like the other neocolonial organizations discussed earlier, the CIS is heavily involved in election monitoring in member countries.

I have not gone into specific instances of these organizations at work, but I promise to do so in a future post. Membership in one of these organizations does not necessarily preclude a nation from joining other neocolonial, supranational organizations. Again, I will go into specific case studies at a later date. This post is meant to lay the groundwork for future discussion of this topic.