Calculating the Economic cost of an Internet shutdown

This tool lets you calculate the monetary impact of curbing online access in different countries

Faisal Khan
Nov 29, 2019 · 3 min read

We are increasingly becoming a digitized society with access to the Internet fast becoming a necessity rather than a privilege. The advent of smartphones has accelerated this revolution where everything is accessible online. According to the Mid year-2019 estimate by Internet World Stats more than 4.5 billion people are connected to the grid with an increasing penetration rate of 58.8%.

While the Internet has played a huge role in making all kinds of services more accessible & streamlined, it comes under the radar by the authorities if things get awry. Governments around the world, especially in developing countries are quick to pull the plug on internet access for the general public when they are afraid that its reach is going to instigate the general public if there is simmering trouble.

Although this action from authorities is unwarranted, their fear of the spread of false information through social media channels has some merit to it. At the end of the day, the action does not help anyone. People lose vital communication channel and countries have to bear the economic cost depending on their level of connectivity. Highly connected countries like the U.S and China will have to pay a much steeper price as compared to other countries (chart below).

Recent violent protests over the skyrocketing prices of Oil in Iran brings this issue to light. The latest data suggests that connectivity levels in the country have risen to 64% after flatlining at 5% earlier due to an Internet blackout initiated by the government on November 15 amid worsening crisis. While the government in the Islamic Republic would have deemed it necessary to take this step to control the protests, it cost an already fragile economy to the amount of $61 million per day.

Iraq took a similar step by blocking the social media platforms & messaging apps in Oct. 2019, followed by a complete internet shutdown as protests escalated. In this case, the cost was a staggering $136 million per day. Similar internet shutdown in the Indian city of Aligarh, Uttar Pradesh was witnessed earlier in November on the eve of a legal verdict. The government feared ethnic riots & decided to cut online access.

Two organizations — NetBlocks and The Internet society have come together to devise a tool that calculates the economic cost of total internet shutdown in various countries of the World. While the former is an independent & non-partisan civil society group working at the intersection of digital rights, cyber-security & internet governance, the latter promotes the internet as a resource to enrich people’s lives.

Image: NetBlocks Website

Dubbed as the Cost of Shutdown Tool (COST), it is a data-driven tool that enables anyone to estimate the cost of an internet disruption in most countries of the world. The calculation estimates the GDP impact of the internet shutdown on a country’s economy, where the results are based on the methodologies devised by Brookings Institution and CIPESA.

The work in ongoing on the tool for further improvements which could calculate secondary impacts like the ones caused by the loss in investor confidence and shadow economies. The COST tool has already been trialed for international policy and advocacy work in 2018 with technology demonstrations at various important forums.

Needless to say, it is a useful tool for people from all walks of life — journalists, researchers, advocates, policymakers, businesses & more…


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Faisal Khan

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Content Specialist in Cryptocurrencies | Blockchain | Financial Markets | Technology | Future | Science | Space

Technicity

Empowering you with Technical, Scientific & Financial knowledge

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