Spend £45 for free UK standard delivery | Pay in three with Klarna learn more


The false economy of internet shutdowns

What’s the real cost of shutting down the internet? According to a new report by nonprofit public policy organisation, the Brookings Institute, it’s $2.4 billion USD - in just one year.


Internet shutdowns are increasing in frequency, with the Brookings Institute identifying 81 short-term shutdowns from around the world during the period the report covers. These shutdowns happen when governments order internet service providers to restrict internet access. They usually occur during times of unrest, protests, elections, and even during school exams. Aside from restricting communication, limiting free speech and leading to human rights violations, internet shutdowns have a huge economic impact.

The report finds that between 1 July 2015 and 30 June 2016, the cost of internet shutdowns was $2.4 billion USD globally. This figure is conservative, and likely to be a low estimate of the real impact. There are also other factors not taken into account, such as the loss of tax revenue, loss of business and consumer confidence, and other indirect economic consequences, which may be much more difficult to estimate. Deji Olukotun, senior global advocacy manager at Access Now, comments on the harm internet shutdowns can have on business relationships. He says: “So many of these countries are saying, “We’re open for business, come and invest in us,” and then they shut down the network.”

The country most impacted economically by internet shutdowns within the last year was India. During 22 shutdowns totalling 70 days, the country lost over $968 million USD. A shutdown of messaging service Whatsapp in Brazil for just one day in May 2016 cost the country $39 million USD, due to people being cut off from their businesses.

Hosting a panel discussion following the release of the report, Darrell West, vice president and director of the Center for Technology Innovation at the Brookings Institute, explains the decision to focus on the economic impact of internet shutdowns. He says: “We focused on the economic cost because we felt this was a way to play to the self-interest of the people shutting down the internet. We tried to make the argument in ways that would actually resonate with them.” 

With a steady growth in the digital economy, Darrell highlights how this issue is going to become more pressing for governments in the years to come. He says: “In a few years those countries are going to be in a situation where 10 or maybe even 15% of their GDP (gross domestic product) is going to come from online services and the digital economy. And if they shut it down, that’s really going to hurt their economy.”

Taylor Reynolds, technology policy director of a think tank at the  Massachusetts Institute of Technology, was about to run a telecomm review in Egypt in January 2011, as requested by the Egyptian government. When the government ordered an internet shutdown, Taylor and his colleagues took the opportunity to analyse the economic impact of the five day shutdown. They estimate that this cost Egypt $90 million. Joining Darrell on the webcast panel, Taylor says: “If you shut off the internet for five days, you’re going to shake confidence in businesses doing business with your country.” Taylor also emphasises that the $90 million figure only represents the direct costs of the shutdown. What may seem like a localised issue can have a global impact, and New Zealand was also directly affected by the shutdown in Egypt. About a third of the customer service calls for Vodafone New Zealand go to Egypt, so the effect of the shutdown was felt across the globe.

Kath Cummins, director of communications and outreach at the Global Network Initiative, has a strong message for governments. She says: “A really important message that we want to get through to governments around the world, is that you have to stop seeing shutdowns through a security lens and start seeing shutdowns through an economic development lens. Because if we don’t do that, then there will just be an ever-increasing amount of use of this particular tool against populations.”

Focusing on the economic impact of shutdowns may have more resonance with governments, but what happens when shutdowns can target individuals, and are therefore contained enough to circumvent economic disruption? The issue of the economic damage may have been solved, but the human rights impact still exists. Deji Olukotun from Access Now also joined the panel. He asserts that the economic and human rights arguments need to be used together. He says: “If you just focus on whether people can get away with it, then I think we’re not going to win this battle. We can’t give governments a free pass on human rights violations just because they claim to look after businesses.”

Discussions like this may be a way to make governments sit up and listen, but will it make them care about the whole issue? Or will they simply look for a way to limit the economic impact?

Comments (0)