US teleworker caught subcontracting his own job to China - is this the future ?

Do read the story on the BBC website this morning. The comments on the original blog case study say sufficient on the questions this raises – including that he was working in parallel for other similar employers and very highly rated by all for his efficiency and productivity. Was he engaged in good old fashioned US enterprise or in a criminal breach of security? And what taxes was he paying on his earnings? To which government(s)?

Yesterday I was being told how far behind the curve HMG was in its approaches to on-line security compared to the leading banks – where 60% of serious on-line fraud is said to involve insiders and who therefore now seek to monitor everything that accesses their sytems (globally and not just in the UK) for “anomalies”. But how many routinely routinely analyse the logs, let alone retain them they might be needed for o operational purposes. Where does that leave the HMG UK-centric on-line surveillance policy?

But the story raises are wider and even more intersting issues. It was around thirty years ago that Adrian Norman and myself first talked of the need for Governments to plan ahead for when it would be commonplace for teleworkers to work simultaneously for different employers around the world, physically commuting dependent on time of year (UK for spring, New England for the Fall etc.), family commitments, needs for physical meetings and, of course, tax “planning”.

We argued that politicians should not fight the future. Instead they should seek to ensure that the UK tax and regulatory regimes encouraged such workers to base their families and tax affairs in the UK because it was the best place to rear children, grow old and enjoy life in between – while accepting that, like colonial administrators and the internations merchants, traders and international salesmen who ran the Empire and made Britain the workshop of the world, they would spend their working lives globe trotting: whether on line or clocking up air miles.

Interestingly the story refers to Verizon detecting the “abuse” (if abuse it was). Its mobile partner, Vodafone is probably the company best prepared for providing the ubiquitous, seamless, global broadband infrastructure. Analysts and commentators who value it little more thans its 45% share of the Verizon Wireless (before removing capital gains liabilities etc.) tend to forget that it now owns the global Cable & Wireless submarine networks and much of the UK broadband backbone (including the former Government Data Network). The communications duopoly of BT and Virgin will turn into a triumvirate quite soon as the Vodafone/O2 infrastructure sharing deal gathers pace. Competition will then grow as Arqiva (and its “siblings”, also funded by Macquarry and Canadian pension funds) do deals.

Apparently the main obstacle to Vodafone obtaining a £60 -70 billion war chest to enable it become the leading global (not just UK and EU) fixed and mobile infrastructure player is the capital gains bill it would face after selling out it share of the US mobile operations. What a sorry comment that is on the effect of Government fiscal policy in distorting investment decisions that could enable the UK to once again become the workshop of the world (this time the on-line world) at no expense to the taxpayer.  

P.S. It has been said this was not a teleworker because he was supposedly seen sitting at his desk all the time. Many organisations routinely monitor teleworkers over webcams, inclduidng for positive reasons such as maintaining social contact. There is also a vigorous debate as to whether this is a real case study or a pastiche. Either way, it is a good lead in to debate. See also Karl Flinders comments