Brazil's Plan to Isolate Its Internet Is a Terrible Idea

It’s taken years of wide-ranging, thoughtful, and innovative consultation to draft Brazil’s new civil rights framework for the internet. It’s taken the government just a few weeks to fuck it up.

As with the rest of the world, Brazil's government was far from happy at the revelation that the US National Security Agency was spying on their president, their state-run oil company, and the preliminary results of the Miss BumBum competition. Brazil found itself in the company of Russia, China, Pakistan, and Iran as one of the most spied-upon countries in the world. In fact, this has less to do with the quality of its citizens’ selfies, or even its friendly relations with Caribbean despots, but due to the fact a lot of transatlantic telecommunications cables come ashore in Brazil.

Anti-Americanism is rarely far from the surface in Latin America. Whereas some European countries merely yawned and moved on following the NSA revelations, Brazilians took it personally.

A rigorously scientific survey at an internet café in downtown Rio de Janeiro found that 100 percent of Brazilians who had heard of the story weren't just pissed. They were really pissed. “Scandal”, “shame”, “low-level thing to do”; these were just some of the phrases I heard. Everyone I spoke with demanded something be done.

The government is listening. Not in a creepy NSA kind of a way, but more in a we-feel-your-pain way. President Dilma Rousseff, whose phone calls and emails had also been monitored, canceled a trip to Washington in September, aware of the fact that a photo of her in an evening gown with a grinning President Obama would not boost her re-election campaign.

In a speech full of righteous indignation at the United Nations in October, she accused the US of breaking international law (pdf). As part of a guerrilla group that robbed banks and killed the odd policeman in its campaign against Brazil’s military dictatorship, she argued she was well-placed to lecture the United States on the dangers of an over-mighty state.

"As many other Latin Americans, I fought against authoritarianism and censorship and I cannot but defend, in an uncompromising fashion, the right to privacy of individuals and the sovereignty of my country," she said. Along with Germany, the other country with dangerously high levels of indignation, Brazil has drafted a resolution calling for end to excessive electronic surveillance.

On the home front, Rousseff has kicked up on the agenda a long-languishing piece of eminently sensible legislation on internet usage. But she’s also added her own ill-conceived offspring to the bathwater: local data storage. The president wants internet-based companies operating in Brazil to keep a copy of all their data on Brazilian citizens hosted on servers located in Brazil.

This is a seriously bad idea.

First, the logistical problems: do these companies have to keep the data created by a Brazilian living in London, who's communicating with a Brazilian in the US, in Brazil? So far, the legislation is not clear.

Second, it’s going to be seriously expensive. Nelson Wortsman, the head of Brasscom, which represents local tech and IT companies, estimates the start-up cost for a data center in Brazil is USD $61 million, versus USD $51 million in Chile or USD $43 million in the United States. Actually running the thing would cost USD $100 million a year, versus USD $51 million in the US, thanks to a myriad of cost-inflating local factors known collectively as the "Brazil cost."

“We’re not against storing data in Brazil,” Wortsman said. “But if it’s compulsory we are just going to create a black market, and increase the Brazil cost. We are specialists in creating black markets and obliging users to pay for things which make them look for non-orthodox alternatives.”

Another ball-ache for companies providing cloud services is the fact that the data they host would become subject to local privacy laws.

With 86 million internet users in the country—a number that’s set to rise rapidly—and an almost unquenchable thirst for social media, Brazil would still be attractive to the major players. But it’s unlikely the next Facebook or Twitter is going to emerge in a place with such high start-up costs and labyrinthine local regulations. Plus, it’s going to offer an attractive excuse for countries with an even-less enlightened attitude to free speech to demand the same thing. “Balkanisation of the internet” is a phrase critics use, with perhaps little appreciation of the recent history of the former Yugoslavia.

But the killer point is that it’s not going to make the data any more secure.

Professor Carlos Affonso Pereira de Souza, one of the founding fathers of the original bill, thinks Brazil does not have the privacy protections in place to keep the data safe.

“It would be better for a Brazilian internet user to have his or her data stored abroad, maybe even in Europe rather than Brazil since we do not have the legislation needed to provide this user with adequate privacy and security,” he said.

Pereira is a co-founder of the Rio de Janeiro Center for Technology and Society, and he still thinks that, on balance, passage of the Marco Civil da Internet would be a good thing.

In a first for Brazilian lawmaking, much of the original text was shaped by two 45-day periods of public online consultation. As well as the fact that the success of legislation drafted by the non-governmental internet experts could lead to further experiments in crowdsourced policymaking, Pereira said that Brazilian internet users would be better off if the bill, complete with amendment, is passed.

“We will enjoy a greater level of protection of privacy, freedom of expression will be better understood by the courts and net neutrality will provide Brazilian internet users with the guarantee that data discrimination will only happen for technical reasons and not for political, cultural, religious, or commercial reasons” he said.

Net neutrality, of course, is the idea that all internet service providers (ISPs) have to treat all content equally. This would stop, for example, an ISP from blocking or slowing voice-over-internet applications, such as Skype, which compete with its own telephony service. It would also prevent an ISP from blocking access to one social media site, because of a deal it has with another. Without net neutrality, the internet could become like cable TV.

Though most countries subscribe to the idea, it’s yet to pass into law in most places. In the US, it remains seriously controversial. In Brazil, representatives of the big telecoms firms are trying to block the legislation by claiming that net neutrality would restrict consumer choice and that it would force customers to pay for services they do not use. Brazil does have one of the highest costs of data anywhere in the world: A single megabit in Brazil runs 65 times the cost of a megabit in Japan. But, inconveniently for the telecoms firms, this has nothing to do with net neutrality. They would still be able to offer 1MB, 10MB, or 30MB data packages.

The Marco Civil would also help to clarify liability for criminal content. At the moment the law is a mess. Different judges issue wildly different orders following lawsuits by differently-aggrieved internet users.

Last month a judge threatened to shut down the whole of Facebook in Brazil, unless it succeeded in removing defamatory content following a row between Luize Altenhofen, a minor TV celebrity, and her neighbor.

Here's how it went down: Eudes Gondim allegedly hit Altenhofen’s pitbull with a crowbar after it broke into his garden. Bizarrely, Altenhofen chose to retaliate by wrecking her own car in a kind of kamikaze attack on his garage. But it was her subsequent venomous postings on Facebook, which attracted a fair amount of support, that prompted Gondim to seek the judicial order.

Facebook Brazil argued its legal entities are based outside of Brazil, in the US and Ireland, and therefore refused to take the post down. The judge did not like that, calling its attitude “an outrageous disregard to the sovereignty of Brazil." Just for good measure, he added that its actions were “compounded by notorious and official spying by the US government” and told all telecoms operators in Brazil to block access to the site.

In the end, Facebook backed down. Still, the fact that a judge thought the most sensible legal remedy to a minor backyard dispute was to shut down a site used by an estimated 65 million Brazilians, not all of whom use it for Farmville, shows the current law isn’t working. But updating the law to separate Brazil's internet from the rest of the world won't help.

@bruceecurb