Exclusive: Egypt blocked Facebook Internet service over surveillance - sources-By Yasmeen Abutaleb and Joseph Menn

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A man poses with a magnifier in front of a Facebook logo on display in this illustration taken in Sarajevo, …

By Yasmeen Abutaleb and Joseph Menn

SAN FRANCISCO (Reuters) - Egypt blocked Facebook Inc's Free Basics Internet service at the end of last year after the U.S. company refused to give the Egyptian government the ability to spy on users, two people familiar with the matter said.
Free Basics, launched in Egypt in October, is aimed at low-income customers, allowing anyone with a cheap computer or smartphone to create a Facebook account and access a limited set of Internet services at no charge.
The Egyptian government suspended the service on Dec. 30 and said at the time that the mobile carrier Etisalat had only been granted a temporary permit to offer the service for two months.
Two sources with direct knowledge of discussions between Facebook and the Egyptian government said Free Basics was blocked because the company would not allow the government to circumvent the service's security to conduct surveillance. They declined to say exactly what type of access the government had demanded or what practices it wanted Facebook to change.
A spokesman for Facebook declined to comment. Etisalat did not respond to a request for comment.
Mohamed Hanafi, a spokesman for Egypt's Ministry of Communication, declined to comment specifically on the allegation about surveillance demands but cited other reasons for Free Basics to be blocked.
"The service was offered free of charge to the consumer, and the national telecommunication regulator saw the service as harmful to companies and their competitors," he said.
Free Basics, which is available in 37 countries that have large populations without reliable Internet service, is central to Facebook's global strategy. The company does not sell ads on the Free Basics version of its website and app, but it aims to reach a large group of potential users who otherwise would not be able to create Facebook accounts.
Facebook said more than 3 million Egyptians used the service before it was suspended, and 1 million of them had never had Internet access. The main Facebook site and app are still available in Egypt, which has a population of about 90 million.
The conflict over Free Basics highlights the delicate balancing act that global Internet companies face in responding to the demands of governments while protecting the privacy of their customers, especially at a time of heightened concerns about Internet surveillance and censorship worldwide.
It represents one of the few known cases in which a global Internet company has received and rejected a government demand for special access to its network and been forced to shut down a service, Internet privacy experts say.
Free Basics has come under fire from Internet activists across the globe, most notably in India, for violating net neutrality by allowing free access to a select group of websites and businesses, thus putting others at a disadvantage.
Indian regulators issued new rules in February that effectively barred Free Basics after a two-month public consultation process.
Hanafi cited the India example in explaining Egypt's move, but there has been no public debate or regulatory proceeding over net neutrality or the competitive impact of Free Basics in Egypt.
STRONGER SECURITY
Facebook in September strengthened the security protections for Free Basics after criticism from privacy advocates that it did not do enough to prevent spying. In part, the problem was that users could not seamlessly connect over encrypted channels to the secure websites marked by addresses beginning HTTPS.
That meant that customers using web-based email might have their messages exposed. Authorities might also be able to watch who was visiting particular websites.
Now, those using the Free Basics mobile app can connect directly with encryption to secure sites. Those connecting via the Free Basics website can connect securely to Facebook, which decrypts and then re-encrypts user traffic before sending it along to partner sites.
It is not known whether the new security measures were a factor in Egypt's decision to block Free Basics. It is also not known if the government has asked other social media companies or Internet service providers for security back doors.
When Free Basics launched in Egypt, there was no mention of a temporary permit or concerns about competition or net neutrality, according to people who were involved in the discussions.
At the time of the suspension, Facebook said it was "disappointed" and hoped to "resolve (the) situation soon."
Some former Facebook employees said the company has reason to be especially vigilant in defending its customers in Egypt.
A Facebook page started in 2010 by a Google employee in Dubai about the death of an Alexandria man at the hands of police played a direct role in fomenting the protests that toppled autocrat Hosni Mubarak in 2011.
In January this year, amid a crackdown on dissent in the run-up to the fifth anniversary of the uprising, Egyptian security forces arrested two people for managing Facebook pages that they said were used to support the outlawed Muslim Brotherhood and encourage protest.
The two are still in jail pending investigations on charges of inciting violence and disseminating and publishing false news.

Any move to shut down Facebook completely in Egypt would likely bring a harsh popular backlash, said Ramy Raoof, a digital security researcher and consultant. But blocking Free Basics can crimp Facebook's growth among lower income people, without alienating middle-class Internet users and businesses.

"Shutting down Facebook completely is an idea that is far-fetched and would lead to great consequences," Raoof said.

(Reporting by Yasmeen Abutaleb and Joseph Menn in San Francisco; Additional reporting by Ola Noureldin and Ahmed Mohamed Hassan in Cairo; Editing by Jonathan Weber and Tiffany Wu)

Culled from Reuters

Your Retirement Savings Are Big Enough, Study Shows

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If you're worried about your retirement savings, you can probably relax. If you’ve been saving in a 401(k), IRA, or taxable account, you're likely to be just fine, a recent study shows.

Why? Because Americans who consistently sock away money also end up spending less than they expect to in retirement, according to the Retirement Consumption Gap, a study by Texas Tech University. “There is definitely pervasive underspending” among wealthy retirees, says Christopher Browning, assistant professor of personal financial planning at Texas Tech University and coauthor of the study.
The research looked at the retirement savings and spending habits of retirees. Browning ran hundreds of portfolio simulations that used different mixes of stocks, bonds, and fixed-rate annuities to see how much retirees could spend each year while being assured they would not run out of money for 30 years. Overall, the research found that retirees have enough in retirement savings that they could spend 8 percent more than they do every year.
Some people could spend even more than 8 percent, the study showed. Households that started retirement with investable assets of at least $650,000, for example, could spend 38 to 54 percent more and not run out of money for 30 years. Households with assets of more than $100,000 but less than $200,000 could spend between 17 and 25 percent more based on their mix of stocks, bonds, and fixed annuities.
So why are retirees not spending more? It could be in order to leave a bequest or to have enough money to cover the costs of later-life care.  But even when the researchers reran the numbers starting with an assumption that 40 percent of a household’s assets on their retirement date would be held in reserve, the median underspending for wealthier households was still more than 40 percent.
This information aside, not everyone should be worry-free. In its new annual Retirement Confidence Survey, the Employee Benefit Research Institute found that 40 percent of respondents had no retirement savings at all, beyond what they have earned through Social Security or a pension from an employer.
Boost your confidence in your financial future by taking these steps:

• Create a retirement savings plan. Consider hiring a financial planner to help you nail down a safe-meaning sustainable-retirement income plan. In a recent survey, about half of pre-retirees with a written plan say they are confident about their retirement, compared to less than 20 percent without a formal plan.
• Recognize your spending will fall through retirement. According to EBRI, spending for a 65-year-old retiree decreases by 19 percent by age 75, and spending is halved for retirees who live to 95. Morningstar Investment Management retirement expert David Blanchett found that even though later-life medical expenses tend to rise, reduced spending elsewhere, such as  on entertainment and travel, offsets those costs.
• Understand the shortcomings of retirement calculators. Even the best online tools, such as the T. Rowe Price Retirement Income Calculator, have an embedded flaw: They assume that your spending will be constant throughout your retirement and that there will be automatic annual inflation adjustments. Not only will you likely spend less through retirement but you will also have the ability to adjust your spending in the face of portfolio declines. Skipping an annual inflation adjustment when the market dips or even scaling back your withdrawal in a year following a bear-market is a sure-fire way to extend the life of your investment portfolio.

Culled from Consumer Reports

Turkish firms in Russia struggle as diplomatic row rages - By Alexander Winning

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Russian President Vladimir Putin speaks during his annual end-of-year news conference, with a flag of …

By Alexander Winning

MOSCOW (Reuters) - Four months after President Vladimir Putin accused Ankara of a "stab in the back", Turkish business executives in Russia are getting used to saying hasty goodbyes.
"Every week another friend calls to say he's leaving," one Turkish businessman based in Moscow told Reuters. "It's become very difficult for Turks to do business here."
The row erupted in November when Turkish military jets shot down a Russian warplane near the Syrian border, and is still weighing on what had been a close economic relationship.
Putin has imposed sanctions on Turkey and trade between the two countries - which back opposing sides in the five-year Syrian conflict - has dived due to the combined effects of the measures and the collapse in global oil prices.
In interviews with Reuters, expatriate members of the Turkish business community accused Russian authorities of creating obstacles for their firms that go beyond the measures set out in the official sanctions.
This, along with economic crisis in Russia, was why increasing numbers of Turks are heading back home, they said.
Before the plane was brought down, about 1,500 Turkish firms operated in Russia in businesses ranging from construction and tourism to imports of Turkish fruit, vegetables and textiles.
While no numbers are available, one of the expatriates estimated that around 200 Turkish firms have since left.
Many Turkish executives say they have experienced difficulties in getting Russian visas, and some have had to rearrange their affairs.
Of the four businessmen interviewed in Moscow, two said they had registered their companies in the names of Russian relatives or trusted Russian friends to try to avoid additional checks from law enforcement officers.
All said it was difficult to stay as their country was demonised in Russian media. The Komsomolskaya Pravda mass-market tabloid ran a report earlier this month headlined "Turkey never was and never will be a friend of Russia".
The businessmen requested that their names and those of their firms not be published, citing fears that public comments could result in further pressure from Russian officials.
Russia's Interior Ministry did not respond to a Reuters request for comment. The Economy Ministry said the problems outlined by Turkish businessmen did not fall within its remit.
FIRST SHOCKWAVE
Ikbal Durre, a Moscow-based commentator on Russian-Turkish affairs, expressed hope that the row would eventually blow over. "The situation is moving towards stabilisation, just not particularly quickly. The first shockwave has passed," he said.
But the cost has been high. Turkish exports to Russia fell to around $108 million in January, according to the Turkish statistics service, down two-thirds on the previous year. Russian exports to Turkey, mainly of energy, were 30 percent lower at $1.3 billion, reflecting weak oil prices.

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A man passes by police officers standing guard near the Turkish embassy in Moscow, Russia, March 24, …

The sanctions include a ban on Russian firms importing a range of Turkish foodstuffs as well as cancelling a visa-free regime and restricting Turkish firms from working in certain Russian business sectors including tourism.
Turkish firms had stood to gain from an earlier set of Russian sanctions - restrictions on Western food imports imposed in retaliation for U.S. and European Union sanctions over the Ukraine crisis.
Now Turkish businessmen say that over-zealous Russian officials are subjecting their goods to additional checks at customs and have conducted impromptu searches at their premises.
Dagir Khasavov, managing partner of Moscow-based legal firm Drakonta which has Turkish clients, described the attitude of Russian law enforcement agencies towards Turkish citizens since the downing of the plane as "hostile".
FEELING LIKE A THIEF
One Turkish businessman said he had registered his firm, which serves Russia's metals industry, in the name of a Russian friend to try to avoid problems. "I used to own 100 percent of my firm. Now I feel like a thief of my own goods," he said.
The first businessman cited in this article said shipments of Turkish textiles were sometimes held up for as much as 20 days at the Russian border, longer than previously.
A Turkish diplomatic source said it was too early to say the two sides had found a way to resolve the dispute. "We hope that a compromise can be found, but we haven't seen any big shifts so far," the source said.
Around 80,000 Turkish citizens live in Russia, although not all are involved in business.
NO CERTAINTY
Earlier in March a small group of Turkish businessmen based in Moscow returned home to share their concerns with economic policymakers there, one of the businessmen said.
They explained that if the exodus of their compatriots from Russia continues, it will be difficult for Turkish business to regain its former standing in Russia.
"Investment is a sensitive thing, and at the moment there's no certainty," one businessman said.
The diplomatic spat has also cast a pall over Turkey's tourism sector as Russians cut back on trips there.
One potential bright spot is that a Turkish firm, Renaissance Construction, won a tender this month to build a terminal and tunnel at Moscow's Sheremetyevo Airport.
However, Renaissance Construction submitted its bid via its Russian subsidiary and the airport operator had no choice on the nationality of its contractor - the only other bidder was another Turkish firm, Limak.

A Russian employee at a Russian-Turkish business group in Moscow said all joint investment projects had been frozen in line with a Russian government order. "For the moment there is a lock-down," he said. "Informal contacts continue, but it looks like projects will be frozen for this year at least."

(Additional reporting by Nevzat Devranoglu in Ankara; editing by David Stamp)

Reuters

How People Underestimate Spending in Retirement-By Shlomo Benartzi

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It’s conventional wisdom among financial advisers: People planning to retire should aim to maintain 70% of their current income in retirement.

It sounds sensible enough. But in reality it can encourage people to underestimate the amount of money that will keep them content in retirement.
The 70% rule leads us astray because it fails to address the emotional cost of losing 30% of our income. Most people focus on the 70% they will keep, not the spending they will give up. They aren’t prepared for the changes that will be required in their lifestyles. When they eventually are confronted by the specifics they have to cut, they are unhappy. In short, the 70% rule makes the future seem secure and comfortable, even when it’s not.
Behavioral economists refer to this as a framing effect. Similar examples abound in everyday life, as people find choices far more appealing when they are framed in terms of gains rather than losses. For instance, people are more likely to buy ground beef when it’s described as 75% lean rather than 25% fat. They think a condom with a 95% success rate is safe, but are scared of one with a 5% failure rate.
Framing effects can even shape our estimates of longevity. Research by a group led by John Payne, a professor at Duke University’s Fuqua School of Business, finds that when people are asked to estimate their lifespan using different frames, they come up with strikingly different answers. In particular, asking subjects if they will “live to” a certain age leads to estimates that are roughly six to nine years longer than asking if they will “die by” a given age.
Why? One explanation is the “live to” frame focuses our thoughts on the reasons we might stay alive. When people are given the death frame, by contrast, their minds are naturally drawn to the reasons they might die. Instead of thinking about their healthy exercise habits, they focus on their love of hamburgers.
Framing effects matter because they shape our perceptions of the world and the content of our thoughts. The question hasn’t changed, but the frame can determine how we judge alternatives and what we end up choosing.
So how can we ensure that framing effects don’t ruin our retirement? Here’s my proposal: Before workers settle on a retirement-savings goal, or decide it’s time to retire, they should undergo a behavioral stress test. In short, they should be asked to identify three expense categories they will cut in retirement, with instructions to be as specific as possible as to what exactly they will cut. These cuts should be significant enough to add up to approximately 30% of their current spending.
In my experience, while most people find the 70% rule palatable, they find the 30% frame unacceptable. When asked to think specifically about where they would be willing to sacrifice—perhaps dining out, travel, or spoiling the grandchildren—that is when they become more aware of how much they are being asked to give up.
And that’s the point of a behavioral stress test.
The key insight is that people need to be exposed to both gain and loss frames to be able to make realistic decisions about the income they will need in retirement. Behaviorally, neither frame by itself is sufficient. While the gain frame can lead people to underestimate the amount of sacrifice that will be necessary, the loss frame might cause them to think too negatively about the consequences of those sacrifices. Indeed, economic research has shown that big differences in income typically result in minor differences in happiness.
The behavioral stress test probably will encourage most people to increase their retirement-savings goals, and thus have more income in their later years, allowing them to avoid giving up certain pleasures and activities.
It is the same for banks when they undergo stress tests in an effort to determine their ability to withstand a financial crisis. The tests help them identify hidden risks and correct mistaken models before it’s too late.
By considering both gain and loss frames, we can start to figure out what we really want—and what we definitely don’t want to live without.


Culled from The Wall Street Journal