The Economic Cost Of Small Internet Shutdowns

The Telegraph Act, 1885 gives government officials broad powers to curtail internet access. This has been economically costly.

<div class="paragraphs"><p>the <a href="">Internet Society</a> estimated the loss caused by internet shutdowns in India in 2022 to be $2.369 billion (Rs 187.22 billion). (Source:&nbsp;<a href=";utm_medium=referral&amp;utm_content=creditCopyText">FLY:D</a> on <a href=";utm_medium=referral&amp;utm_content=creditCopyText">Unsplash</a>)</p></div>
the Internet Society estimated the loss caused by internet shutdowns in India in 2022 to be $2.369 billion (Rs 187.22 billion). (Source: FLY:D on Unsplash)

Internet access is basic infrastructure: it is like the supply of electricity or drinking water. However, the Indian executive branch enjoys broad powers to switch off internet access. This power is being used frequently. India is the world leader in internet shutdowns. In 2022, 77 of the 187 internet shutdowns across the world were in India.

Rules framed under the Telegraph Act, 1885 allow internet shutdowns at the discretion of officials, in cases of a “public emergency” or a situation that threatens “public safety”. This gives enormous power to the executive branch. The Lok Sabha Standing Committee on Communications and IT noted that these terms are not clearly defined and are therefore susceptible to “misinterpretation and misuse”. The rules only allow the Home Secretary of the Union/state government, or in case of unavoidable circumstances, a duly authorised officer not below the rank of Joint Secretary, to authorise a shutdown. Despite this, district magistrates often impose blanket shutdowns using their powers under section 144 of the Criminal Procedure Code. Some shutdowns may be triggered by serious law and order problems. But others include reasons like the prevention of cheating in examinations.

This naturally raises questions about fair play and fundamental rights — after all, the people must have the rights of free speech, association and trade. We need to think about the extent to which the Indian state should have such powers and the required due process for this power to be recognised.

Let us turn to the economic impact. Academic studies as well as national and international media have calculated the economic consequences of a shutdown. For example, the Internet Society estimated the loss caused by internet shutdowns in India in 2022 to be $2.369 billion (Rs 187.22 billion). Out of 423 shutdowns in the last five years, 362 were shutdowns of mobile internet services and 61 were shutdowns of broadband services.

These problems are particularly relevant because India’s most important industry – IT and IT-enabled services – rides on the Internet. Even small interruptions at the local level to the IT service ecosystem have significant effects on lost income in large sectors of the economy.

GitHub is the most important collaborative version control system in the field of software development. In 2022, nearly 10 million users (10% of the total) on GitHub were from India. Among the top thousand GitHub developers in India, roughly a third do not mention any corporate affiliation. It is becoming increasingly common for developers to work on a freelance basis for clients who could be based anywhere in the world. These 10 million Indians on Github are the most important minds in Indian software development. All the work on GitHub can only be done with complete connectivity. Similarly, programmers continuously interrogate the Internet through tools like Stack Overflow or ChatGPT to answer questions and engage in problem-solving.

Some new evidence, that unfolded recently, helps us see the consequences of a small blockage of a website’s access. The Italian government blocked access to ChatGPT for a month in April. It is important to see how limited this blockage was: only ChatGPT was interrupted, and everything else (including normal GitHub use) was uninterrupted. Researchers found that productivity among developers in Italy fell by 50% in the first two days.

`Virtual private networks’ are commonly used to protect the user’s security and privacy while using the internet and accessing web resources whose access is otherwise not available. Users in Italy resorted to VPNs and browsers like Tor to circumvent the blockage, and the adverse impact thus declined as the days went by. In India, if such a scenario arose (of government blocking ChatGPT), there are limitations faced in VPN access also. For example, in April 2022, CERT-in issued directions that required VPN service providers to collect Know Your Customer details from their users, something that militates against the concept of a VPN. These requirements were later clarified to apply only to “general internet users” and not “enterprise/corporate VPNs”.

Internet access barriers in India are, of course, routinely bigger than the loss of access to ChatGPT. Even though GitHub is the fundamental building block of the modern software development environment, it has been blocked twice: first in December 2014 for twelve days and more recently in January 2023 for twenty days.

Much has been written about the infirmities in the laws governing website blocking, internet shutdowns and cybersecurity requirements. Political philosophers need to think about freedom in India, and devise the checks and balances that should be placed upon the Indian administrative state in its powers of closing down access to a given website, or tools like VPNs, or complete Internet access. Over and above this, the use of these powers is self-defeating in terms of economic strategy. India does one big thing well, and that is IT services and IT-enabled services. Our self-interest in business and economic terms suggests that we should not interfere with the golden goose.

Ajay Shah and Karthik Suresh are researchers at XKDR Forum.

The views expressed here are those of the author, and do not necessarily represent the views of BQ Prime or its editorial team.