News Risk Management23 May 2018

India:Internet shutdowns cost economy $3bn from 2012-17

23 May 2018

16315 hours, or approximately 680 full days of Internet shutdowns in India cost its economy approximately $3.04bn during the period 2012 to 2017, says a recent report from the Indian Council for Research on International Economic Relations.

The Anatomy of an Internet Blackout: Measuring the Economic Impact of Internet Shutdowns in India report from the Indian Council for Research on International Economic Relations, examined the impact of complete Internet shutdown across various devices and related ecosystems. The ‘shutdowns’ referred to are intentional disruptions of the Internet ordered by the state authorities.

The report described them as ‘in the same class as network disruptions and represent a tool of Internet censorship’. It found that these shutdowns comprised 12615 hours of mobile Internet shutdowns costing about $2.37bn and 3700 hours of mobile and fixed line Internet shutdowns in India, which cost $678.4bn.

Small businesses most affected

The impact of these shutdowns is greater on small businesses compared to large businesses which have more alternatives resources, noted the report. Most affected are e-commerce businesses, along with online freelancers who operate out of small towns and are completely dependent on a functioning Internet.

“Internet shutdowns are a growing concern in India. At a time when India is leveraging the impacts of a generative technology like the Internet to give boost and expression to Digital India, the rising number of shutdowns epitomizes the difficulties on the pathway to realising India’s digital ambitions,” noted the study, which examined only complete shutdowns and not ‘partial’ shutdowns like throttling or blocking data.

Sectors that are heavily Internet dependent, such as tourism, IT services and the news media industry are also adversely affected. Impact on banking services, however, is limited as their operations run on private leased lines and remain uninterrupted, with at most small volumes of online banking transaction disruptions. Other categories less affected like banking are education, healthcare  and manufacturing and heavy industries least affected.

Number of shutdowns on the rise

The Shutdown Tracker Optimisation Project (STOP) run by the civil society organisation Access Now reported in September 2017, that India with 54 shutdowns had topped the list of 30 countries that witnessed shutdowns in the preceding 21 months.

The report noted that the total number of shutdowns have more than doubled in 2017 (70 shutdowns) from 2016 (31 shutdowns), though the total hours of shutdown increased by only 20% from 6784 hours in 2016 to 8141 the next year.

Recommendations

According to the report’s authors,  interactions with stakeholders on alternatives to Internet shutdowns have highlighted the importance of capacity building of law enforcement agencies and counter-speech among other necessary efforts.

“It is beyond the scope of this study to make any blanket assessment of the effectiveness of Internet shutdowns in addressing the concerns of the government,” said the report, noting that stakeholders provided contrasting views on the effectiveness of Internet shutdowns, which reinforces the need for a thorough impact assessment of each Internet shutdown ordered.

Based on quantitative and qualitative analyses, it proposed the following recommendations for shutdowns:

  • Building a civilian line of reporting
  • Curbing disproportionate Internet shutdowns
  • Providing official notification or communication of Internet shutdowns
  • Documenting Internet shutdowns
  • Building corporate accountability
  • Improving connectivity and providing alternatives
  • Using and promoting effective counter-speech
  • Promoting educative campaigns on curbing hate speech, and inflammatory messages
  • Promoting independent fact checking
  • Sharing best practices and capacity building across states

The report can be found here.

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