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Egypt's Social Media & Internet Shut-down Could Cost A Pharaoh's Ransom

With social media going dark in Egypt and with proposed legislature before the U.S. Congress to institute a similar "Kill Switch," is it any wonder that when Hosni Mubarak decided to turn off the Internet, that not only would 'all hell would break loose,' but that his country would incur a major economic hit.

Closing off access to social networks like Facebook and Twitter, plus disengaging the Internet is a costly matter for any country. For Egypt, according to a top Western think tank, they believe Mubarak's rash actions against his country's anti-government protests will cost Egypt a minimum of $90 million.

The Egyptian government cut off all Internet service in the country on January 27, restoring it February 2. The Organization for Economic Cooperation and Development asserted that the blocked services accounted for roughly 3-4 percent of economic output, resulting in a loss of $18 million per day for the Egyptian economy. Even before shuttering social networks and the Internet, the Egyptian stock exchange plummeted 16%. Some Gulf markets dropped 5%, and stock losses are estimated at around $50 billion.

After the lift, many economic critics say it may be some time before the actual cost of the shut-down can be determined. "We have never seen a country as connected as Egypt completely lose Internet connectivity for such an extended period," said Craig Labovitz, chief scientist at Arbor Networks, on his company's security blog.


According to a ComputerWorld report, by cutting telecommunications links, the government severed links between domestic and international high-tech firms and the rest of the world. As a result, the OECD warned, Egypt could find it "much more difficult in the future to attract foreign companies and assure them that the networks will remain reliable."

Mobile phone services accused the Egyptian authorities of using its network to send unattributed text messages supporting the government. When Vodafone was allowed to resume service, Vodofone issued a statement indicating the government's decreed messages were "unacceptable."

Labovitz noted that while other countries like Iran and Myanmar have experienced similar disruptions in the past, the Egyptian outage represents a new Internet milestone. "As a sign of the growing importance of social media, and web sites, it is telling that Egyptian telecommunications block largely focused on the Internet — mobile and fixed line service returned earlier in the week," he said.

The Wall Street Journal reported that the International Monetary Fund was prepared to assist Egypt if necessary, once the economic impact was officially determined.  Responding to queries during a briefing on February 3, IMF's External Relations Director Caroline Atkinson said that "we just don't know yet how the economic situation will develop because it's not yet clear how the political situation will develop."

So this cautionary tale came at just the right time for the U.S. government to critically review the "Protecting Cypberspace as a National Asset" Act proposed by Senator Joe Lieberman. Basically creating an Internet Kill Switch, the bill, if passed would allow the president to shut down all access to the Web, if the country was threatened.

Debate continues, but perhaps what's transpired in Egypt will make the U.S. Congress think twice before even considering voting this bill into law. In my opinion this is a gross over-reach of power, and based on Senator Lieberman's argument that if "China can do, why can't we," is reason enough to  vote against such legislature. Your thoughts, readers?


Comments
Feb 4, 2011
by Anonymous

shutting down Net shuts down Commerce

Egypt loses Tourism,
orders.
Sales alone for area.
& info for events, planning: pre riot timeline.

Whole area loses.

Cancel Internet KILL switch.

No Tourism to area=NO Income=No jobs=More protesting.