The Anatomy of an Internet Blackout: Measuring the Economic Impact of Internet Shutdowns in India

Kathuria, Rajat

With Internet shutdowns on the rise, many studies and reports have looked at various dimensions of the issue. While there has been extensive work on the legal and human rights implications of Internet shutdowns, studies that focus on the economic impact have been few and far between. The OECD was among the earliest to measure the economic impact of Internet shutdowns in Egypt. More recently, studies by the Brookings Institute and Deloitte also measure the economic impact of Internet shutdowns. We estimate the economic impact of shutdowns using a two-step top down methodology. In step 1 we estimate traffic affected by the shutdown and in step 2 we estimate the economic cost of the traffic affected using estimated elasticities. We employ standard procedures such as the instrumental variable method to estimate elasticities for mobile Internet and total Internet use. The measured elasticities are used to compute the economic impact of each shutdown reported in India between 2012 and 2017. Each instance of shutdown is tabulated with details on regions impacted, duration and network disrupted (mobile / mobile and fixed line). We take advantage of India’s diversity and the availability of state level data to investigate economic impacts within India – between states for mobile only and mobile plus fixed line shutdowns.