Brazil's local Internet data storage plan runs into opposition


By Anthony Boadle and Esteban Israel

BRASILIA/SAO PAULO, Nov 4 (Reuters) - A government plan toshield Brazil from alleged U.S. spying by forcing globalInternet companies to store data on Brazilian users inside thecountry has run into mounting opposition in Congress,politicians said on Monday.

The legislation was proposed by President Dilma Roussefffollowing revelations that the U.S. National Security Agencyconducted surveillance on her emails and phone calls, along withthose of average Brazilian citizens.

Brazil's largest political party, which is a Rousseff ally,is not supporting the requirement, which has Internet companiesup in arms. Not even the bill's author is convinced.

The measure was added to a bill drafted in 2011 aimed atprotecting the civil rights and privacy of Internet users inBrazil that could be put to vote in the lower chamber ofCongress as early as this week.

The requirement for in-country data storage is opposed bycompanies such as Google and Facebook, whocontend that it would increase their costs and erect unnecessarybarriers in what is supposed to be a frontier-free World WideWeb.

If passed, the new law could impact the way Google,Facebook, Twitter and other Internet giants operate in LatinAmerica's biggest country and one of the largesttelecommunications markets in the world.

Despite the criticism of international business lobbies, Rousseff is pressing lawmakers to vote as soon as possible onthe bill, which was dubbed Brazil's "Internet Constitution."

The bill's author, congressman Alessandro Molon ofRousseff's ruling Workers Party, opposes the requirement.

"There is a lot of pressure from the government for the datacenters to be here in Brazil," a spokesman for Molon toldReuters. He said Molon was still trying to negotiate theexclusion of the controversial proposal from the bill.

Brazil's largest political party, the PMDB, also opposes therequirement of in-country data centers, according to its leader in the lower chamber of Congress, Eduardo Cunha.

Cunha initially favored Rousseff's proposal requiringlocalized storage of data on Brazilian Internet users, but toldReuters he would follow the party line on the issue.


Cunha has been a critic of another requirement in the bill - net neutrality - which is opposed by telecom companiesoperating in Brazil because it would bar them from introducingdifferential pricing according to Internet usage and downloadspeeds.

Rousseff's government has insisted that net neutrality,which ensures service providers and regulators cannot restrictusers' access to Internet content, must remain at the heart ofthe legislation.

However, following the U.S. spying revelations based ondocuments leaked by former NSA contractor Edward Snowden,requiring Internet companies to store their data on Brazilianswho are inside the country has become a priority for Rousseff.

Angered by the revelations of U.S. espionage, Rousseffcanceled a state visit to Washington and denounced massiveelectronic surveillance of the Internet in a speech to the U.N.General Assembly.

The mounting opposition in Congress to Rousseff's insistenceon in-country data centers could become a bargaining chip topersuade her government to drop its defense of net neutrality.

According to Ronaldo Lemos, a Rio de Janeiro StateUniversity professor who helped craft the original bill, telecom companies have become more vocal in their opposition to netneutrality and want it watered down or removed altogether.

If that happens, what was once considered a model law forthe Internet could end up becoming a model for what is wrongwith the Internet, Lemos said.

"We could end up with a law that gives up on net neutralityand forces companies to have data centers in Brazil," he said.

"This would be worse than espionage. We would be giving abusiness sector, the telecommunications companies, the power todecide the future of the Internet in Brazil," Lemos said.

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