The economic cost of network blocking

The Internet has become the global medium for a huge range of economic and social activities. Its success has been made possible by technical standards, infrastructure, and practices applied on a global scale, developed without government intervention at the technical level. ​​​​​​​​​​​​However, the desire of national governments to exert more control, via network blocking, over the content and services offered online in their respective countries may come at a cost to the operation of the global Internet. By intervening at the technical layer, governments risk fragmenting the Internet’s technical fabric. Recent examples show a patchwork of approaches to restricting access to illegitimate content, leading to diverging national regulations and increasing technical fragmentation. 

A siloed approach to controlling access to content by intervening on technical infrastructure through network blocking may introduce friction,​​ leading to inconsistent user experiences and negative economic consequences. Network blocking can cause immediate economic cost, by interrupting the activity of legitimate Internet-based services that are unrelated to the illegitimate content being targeted. Network blocking can also discourage investments and increase compliance costs for businesses, particularly small and medium-sized enterprises – potentially leading to a situation where only large businesses can manage the complexity of varying national regulations. Network blocking may also threaten the openness and economies of scale that have allowed businesses to be created, expand, and flourish through a common shared infrastructure. This environment may give way to hard ‘digital borders’ for online services, with limitations to the global collaboration that has underpinned Internet security and resilience, while threatening investment in new services and infrastructure. 

This paper, sponsored by Cloudflare, focuses on the impact of network blocking, including the use of Internet Protocol (IP) address blocking and Domain Name System (DNS)-based blocking, on the overall fabric of the internet. We outline the mechanism and effectiveness of network blocking techniques, their economic impact, and some of the alternative solutions available to policy makers. The purpose of this paper is to (1) explain the network blocking approaches used to restrict access to certain Internet content; (2) explore how network blocking, often driven by private interests, causes economic costs on a much wider scale than the harm sought to be addressed, including via immediate spillover on parties other than those involved in the harm, and potentially longer term disruption to the Internet’s global technical fabric and (3) show that network blocking should be wielded with care, and that pursuing an alternative approach of removing illegitimate content at source would likely be more appropriate.