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Explainer: Ongoing Internet Blackout In Iran Hits Various Sectors Of The Economy

A man holds a smartphone connected to a Wifi network without internet access at an office in the Iranian capital Tehran on November 17, 2019.
A man holds a smartphone connected to a Wifi network without internet access at an office in the Iranian capital Tehran on November 17, 2019.

Iran's Supreme National Security Council's decision to cut off the internet on the second day of protests against the increase in gasoline prices on November 15 has resulted in serious damages to Iranian businesses.

The still ongoing blackout has damaged big businesses as well as start-ups and affected individuals who relied on messaging applications such as Whatsapp and Telegram to do business.

NetBlocks, an NGO that monitors cybersecurity and the governance of the internet, reported on Wednesday that "90 hours after Iran implemented a near-total internet shutdown, connectivity continues to flatline at just 5% of ordinary levels."

Iran's Telecommunication Ministry launched the National Information Network (NIN, also known as national internet or Iranian Intranet)) when the Council decided to block access to the World Wide Web. The so-called national internet is an ongoing project to develop a secure and stable domestic network.

NIN which was proposed by the Ministry of Information and Communication Technology in 2005 is not the same as the Internet. It is a network that itself depends on the Internet to operate but is designed to deny data requests by Iranian users from being routed to outside of the country. Therefore, it offers limited connectivity among domestic users but denies them connection to the outside world, usually on selective basis. In other words, it is a barrier to flow of information, to and from Iran.

But it is not a perfect mechanism. If access to the Internet is completely blocked, NIN does not function properly. "There is so such a thing as a national internet. The Internet blackout causes disruptions in the functioning of the national information network," Mohammad-Javad Azari-Jahromi, Iran's Minister of Communications, said on Tuesday.

Several Iranian officials have claimed that NIN which some online businesses have been forced to use to maintain their activities in the past few days is doing the job of the Internet, but Azari-Jahromi has admitted that the blackout has caused huge damage to start ups as well as small and medium-sized enterprises (SMEs).

According to a report by Etemaad newspaper the Internet blackout has directly caused 9 trillion rials (nearly 800 million dollars) of damage to the Iranian economy in the past few days.

A member of Tehran Chamber of Commerce, Ali Kolahi, told the Iranian Labour News Agency (ILNA) on Wednesday that the blackout is causing concerns for Iran's international trade counterparts because even email communication has now become impossible.

Kolahi said a European bank where he managed to open an account after several months to circumvent the sanctions has been waiting for him to email them some documents. "They were shocked when we told them that the Internet was cut off. Damages to Iranian international trade caused by such incidents is higher than the damages to domestic trade," he added.

According to him the outage is affecting exporters' normal operations, too. A petrochemical company official has reported to the Chamber that normal operations such as checking the whereabouts of shipments or the status of freighters has become impossible, he said.

Speaking to the Iranian Labour News Agency a member of the board of directors of Online Traders' Union said even businesses that use Iranian servers but their websites are hosted outside Iran are experiencing huge setbacks.

Pointing out that in 2009 there were only about 1000 officially registered online businesses in the country, the number now stands at more than 200,000 and these businesses employ 70-80,000 individuals excluding those who use social media for their business, he said: "Many producers sell their products and offer services to customers online. This has created serious problems for them too."

Businesses such as online cab services have had to connect to the NIN for bookings and are now using Iranian web maps such as Balad and Neshan instead of the unavailable Google Maps and Waze. According to the Minister of Telecommunications the number of online cab drivers is in around 2 million.

One of the most seriously felt issues for Internet users in Iran now is the inaccessibility of search engines such as Google. "For years people used the Google search engine to find the products or information they needed. Nobody remembers the names of the domestic search engines" so even the online businesses that are served by domestic servers have seen a decline in their sales because people cannot google and find them, Fararu, a moderate news website reported on Wednesday.

In 2015 and 2016 Iran launched Yooz and Parsijoo search engines to replace foreign search engines. Many Iranian users are not familiar with these search engines. In an article titled "Google-less Days" on Wednesday Asr-e Iran news website said Parsijoo which has been designed to search Iranian websites has nothing to offer. "Even when you manage to connect the message that appears on your screen says it is being updated and can't respond," the article said."

According to the manager of Yooz search engine project Iran ranks 6th in the world in using Google search engine, Mehr News Agency had reported in February 2015. “Iranian users visit Google 25 million times a day, which makes countries such as Germany, France, Italy and China fall in tenth ranking and onward.”

Iranian officials have yet not announced when the blackout is going to come to an end. "If the calm continues in the same way access to the Internet will be re-established," Chief-of-Staff Mahmoud Vaezi said on Wednesday.