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Welcome to the internet death spiral

The idea of a “death spiral” was first mooted both as a critique of the proposed transition away from fossil fuels, and as a likely outcome of growing fossil fuel shortages – damned if we do and damned if we don’t, as it were.  The idea is simple enough.  Something as complex as an electricity grid requires massive spending on running, maintaining and expanding the system.  For this to be affordable, some combination of public support and mass consumption is required.  Public support ensures that those taxpayers with the broadest shoulders carry the bigger cost, while mass consumption ensures that the cost-per-user is kept to a minimum.  Problems begin though, if unit costs rise above people’s ability to pay.  When this happens, those on the lowest incomes either self-disconnect or are forcibly disconnected if they default on their bills.  Of course, this happened to some extent even when the economy was booming and electricity was cheap.  But in the years since the 2008 crash, a much bigger mass of people disconnected or were cut off.

The problem for the energy companies is that the cost of running the system continues to grow even if the income from consumers has fallen.  A temporary response, as we saw in the UK last winter, is for government to step in and subsidise the energy companies by paying a proportion of people’s bills.  But at £38 billion for just five month’s support, this is politically unsustainable so long as the companies continue to operate on a for-profit basis.  And so, the alternatives are some combination of cutting the cost of operating the system, and passing at least some of the additional cost onto consumers – which risks even more consumers cutting back or self-disconnecting, along with more costly court actions to disconnect those who default.

It is unlikely that anybody deliberately created the system with this fundamental flaw at its heart.  Back in the days when electricity grids morphed from small, town-based systems to the complex national and transnational behemoths of today, there was so much cheap coal and gas available that few of those responsible would have considered what might happen if the fuels needed to generate electricity were no longer cheap or abundant.  Indeed, at the time, they were promised nuclear power too cheap to meter in the same way as today’s advocates of ecomodernism made the false promise of cheap and abundant renewable energy.  Nevertheless, it turns out that any infrastructure built around one or other version of mass consumption (whether with or without state support) risks the same inherent design feature in the event that the running costs exceed people’s ability to pay.

Which brings us to the gathering consequences of half a century of economic extremism, compounded by the stupidity of the Versailles-on-Thames class in failing to address the structural weaknesses revealed by the crisis of 2008, and of compounding the problem by breaking global just-in-time supply chains, locking down economies over two years of the sniffles, and then self-sanctioning the world’s last supplies of cheap fuel and resources.  Suffice to say that everything just got a lot more expensive just at the moment that most people’s ability to pay has fallen off a cliff.  In the UK, after a winter of eye-watering energy and food inflation, we learn that eleven million – 16 percent of us – are struggling to pay bills, as Michael Race at the BBC reports:

“Some 3.1 million more people faced difficulties in January than they did in May last year, the Financial Conduct Authority (FCA) said.  It found that 11% of adults had missed a bill or loan payment in at least three of the previous six months.”

This is a problem across a consumerist economy which has largely shifted away from single purchases to various forms of leasing and subscriptions.  Few people, for example, buy their phones outright these days, but simply add them as an additional monthly cost on their broadband package.  Similarly, car dealers advertise the monthly price of a leasing deal rather than the full purchase price because so few of us own our car outright anymore.  This leaves the finance companies behind these deals – often operating in the unregulated so-called “shadow-banking” sector – vulnerable to widespread default.  But it also threatens the continued existence of the corporations which run both access to the infrastructure and, indirectly, to the infrastructure operators themselves.  And it turns out that access to the internet is one of those things that Britain’s growing mass of poor households are prepared to cease using or to default on.  As recent research by the charity Citizens Advice discovered:

“As many as one million people cut off their broadband in the last year as the cost-of-living crisis left them unable to afford internet access…  People receiving Universal Credit were badly affected. The research found them to be six times more likely to have stopped spending on broadband in the last 12 months amidst rising bills, compared to non-claimants.

“The charity fears this problem could get worse. Where people claiming Universal Credit are still paying for broadband, they are more than four times more likely to be behind on broadband bills than those who aren’t.”

Worse even than this, with unemployment now ticking up as cash-starved businesses resort to lay-offs in an attempt to manage growing costs and falling sales, the number of people claiming Universal Credit is set to rise steeply once redundancy settlements have been spent.  Nor is it only cash-strapped households who are cutting back on their internet.  Customer-facing corporations have also begun to view complimentary Wi-Fi as another rising cost that they could do without paying.  For example, as Jemma Dempsey at the BBC reports:

“Rail users could lose access to wi-fi on trains in England as part of cost cuts after the government said it was a low priority for passengers.  The Department for Transport says cost pressures mean it will review whether the current wi-fi service ‘delivers the best possible value for money.’”

Meanwhile, across the UK, public libraries – which provide vital access to the internet for those without a home connection – are being closed as councils seek to balance their budgets at a time when their costs are rising even as their tax base is falling.

For the internet providers, the gathering loss of corporate and government broadband contracts is likely to be as big a hit as the loss of millions of household consumers, since historically, these have been prepared to pay higher business rates for their internet connection.  And as with all of the UK’s privatised critical infrastructure, it leaves the physical internet infrastructure facing a death spiral as the income needed to maintain the system goes away.  We already see the first signs of this in the inability of private companies to afford to roll out the new 5G infrastructure upon which the expansion of the internet depends.

As with Britain’s fast decaying road network and sewage treatment system, as income falls even as costs keep increasing, the next stage in the internet death spiral will be a decline in maintenance – get ready for the bandwidth to shrink and for servers to be down more often.  Eventually, even the software which runs on that infrastructure will breakdown.  Social media, for example, is likely to be highly vulnerable because of its dependency on advertising revenue which will also be declining as discretionary household and business spending dries up.  And while many people will regard this as a good thing, the same cannot be said for the raft of essential services which abandoned the real world in favour of the internet over the last couple of decades.  Banks, for example, have trimmed their physical branches to a bare minimum – mostly in the big metropolises – leaving tens of millions of people wholly dependent upon online banking.  And while visiting a bank branch may not be too much of a hardship for the affluent Marie Antoinettes in the posh suburbs of the top-tier university towns, for someone living in a rural town who can no longer afford broadband, the trip to the nearest bank branch – often depending on buses which only run two days a week – is arduous.  The same applies to a host of government facilities from job centres to tax offices and from law courts to registry offices, which used to be present on just about every high street, but for millions of us are now only accessible online.

Despite the severe disruption that an internet death spiral would cause, it is important not to conflate inevitability with imminence.  As with the energy grid, the water and sewage treatment system, the railways and the decaying road network, there is no reason why an increasingly creaky and dysfunctional internet should not continue for years and even decades to come.  But the common objection that utility death spirals cannot be real because collapse hasn’t occurred yet, is a counsel of complacency – it is akin to the person who jumps from the roof of a skyscraper, and is heard to say, “one hundred floors down and everything is fine!”

The reality is though, that the prosperity which gave us the means to build out much of our critical infrastructure in the first place has been disappearing faster than a falling tide.  And while many of us make the mistake that this is primarily a consequence of spending decisions which might be fixed by changing the seating arrangements in government debating chambers, what is receding is the surplus energy which used to be available but whose energy cost and energy content has been declining for nearly twenty years.

On the bright side, much of the dystopian nonsense emanating from technocratic thinktanks and neoliberal governments, from vaccine passports to programable central bank digital currencies and from social credit scoring to thought-crime monitoring, will not be putting in an appearance (although they may well crash the system beyond repair in the attempt).  But it also points to a serious skills and resources crisis across developed western economies like the UK, as we can no longer depend upon the rest of the world to provide us with the goods and resources we depend upon in exchange for worthless digital dollars, even as it dawns on us that we no longer have the skills, the machinery or the resources to produce them for ourselves.

Indeed, it is likely that the last flickerings of a fading internet will be used in a desperate attempt to re-learn how to grow our own food, produce our own tools, and to make our own clothing… and no, merely “self-identifying” – virtual reality-style – as a farmer, a blacksmith or a weaver is not going to work.

As you made it to the end…

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