The Economic Impact of Internet Shutdowns

hanna
Hanna Kreitem
Disruptions Observer
Categories: Shutdown
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November 12, 2020

One of the indicators we provide as part of our Insights platform is the economic cost of shutdowns. In our data, we rely on a tool developed with Netblocks.org, the Cost of Shutdown Tool (COST). The COST builds upon indicators from the World Bank, ITU, Eurostat and U.S. Census to estimate the economic impact of artificial Internet limitations, including Internet shutdowns, disruption, mobile data blackouts, or app restrictions.

The cost of shutdown provided is a best-effort assessment that we can later compare to actual losses registered by the market or entities specialised in monitoring economic performance. One of the more direct impacts of shutdowns is losses to the telecommunication industry. In a recent release from A1 Telekom Austria Group for its results for the third quarter and first nine months of 2020, the group highlighted the impact of shutdowns and disruptions in Belarus on their operations there. The report showed that in addition to the loss of direct value-added sales, the company had to refund mobile customers for the disruptions. Another impact reported was the increase in the number of complaints and dissatisfaction among its customers.

It is necessary to keep in mind that the costs associated with shutdowns and other artificial Internet limitations are not only felt by big businesses — they extend to affect people’s opportunities and livelihoods.

Photo by Markus Spiske on Unsplash