Truman National Security Project

It’s time for Brazil to back a free, open, and business-friendly internet

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By Eli Sugarman | 10.8.13
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According to a recent report, Brazil holds the dubious distinction of having witnessed the second largest decline in internet freedom of any country in 2013. This is a direct result of its schizophrenic internet policies that must be changed. Rather than breathing new life into efforts to limit a free and open internet—through enhanced governmental and United Nations control—Brazil should double down on its more business-friendly policies on internet growth and urge fellow governments to follow suit.

No single person, company, organization, or government controls the internet and decides what technology is used online, what videos are shared, or how goods are sold. The internet’s multi-stakeholder governance structure gives all players a voice but also fosters the free flow of information by drawing upon the best input from government, civil society and business. So far, this approach has successfully created and nurtured the internet upon which we have come to rely.

The private sector plays a critical role in managing the internet since it consists almost entirely of privately-owned commercial networks. The private sector, not governments or international organizations, builds these networks and drives internet expansion through business decisions (e.g. construction of new networks), development of new content (e.g. email services, online video, mobile payment mechanisms), and the creation of platforms for locally relevant content (e.g., YouTube, eBay). Governments can incentivize or dissuade specific behavior through laws and regulations, but they cannot force companies to invest in networks, applications or services.

Promoting internet growth through business-friendly policies

Some of Brazil’s internet policies do empower the Brazilian private sector and deserve to be emulated by other countries. For starters, Brazil is aggressively expanding its domestic internet bandwidth by building internet Exchange Points (IXPs) throughout its territory. This relatively inexpensive physical infrastructure allows Internet Service Providers (ISPs) and content providers, which are typically private companies, to deliver content more quickly to end users (especially in rural areas).

Improving domestic and regional infrastructure and increasing speed are critical steps that enable Brazilian companies to innovate, reach additional customers, and offer new services. However, Brazil should be careful to ensure that new and existing IXPs are run in a sustainable, inclusive way with input from business, civil society, and the technical community—not by unilateral government decision-making.

Brazil is also enhancing its connectivity with other countries by supporting private sector construction of undersea fiber optic cables that touch Africa. Likewise, Brazil backs the development and launch of the country’s first strategic communications satellite and development of privately-owned overland fiber optic cables to Brazil’s South American neighbors. Together, these approaches are a boon for business because they will provide higher capacity, lower costs, and promote internet access in other developing countries, which in turn increases the number of consumers who use the web.

Encouraging the private sector to produce additional domestic content is another priority of Brazil. It seeks domestic alternatives to Google, Facebook, and other content providers subject to US law that must turn over Brazilian users’ data to the US government. Although it may be difficult for the Brazilian government to choose winners among domestic content creators, there is no harm in incentivizing them. The Brazilian government should be careful, however, not to limit Brazilians’ options by imposing punitive requirements on foreign content providers or by requiring Brazilians to use a domestically-created email service, for example. If Brazilians want to use Gmail, they should be able to do so. Limiting choice and competition stifles rather than stimulates innovation.

Undermining the private sector—and the free and open internet

Unfortunately, Brazil is simultaneously harming the internet through several government-centric policies that undermine the private sector. Data localization, for example, would impose large costs on foreign internet companies by requiring them to store all Brazilians’ information on servers located in Brazil. This could force popular online platforms to withdraw from the Brazilian market, thereby depriving Brazilian users of their content offerings instead of investing in a significantly larger local presence. While Brazil may avoid such repercussions because of its size—it boasts the second largest number of Facebook users worldwide—smaller countries that follow Brazil’s lead would not. Such policies would risk the balkanization of the internet and result in fewer options for consumers and customers for businesses.

In a dangerous precedent, Brazil has held ISPs and websites liable for third-party content they carry. In 2012, the government arrested and jailed Google’s Brazil country manager on criminal charges after Google refused to remove a video from its YouTube service that was critical of a local mayoral candidate. Facebook and Orkut, a Google social networking site that’s popular in the country, have also faced liability suits in Brazil for content posted on their sites. Requiring internet companies to filter and/or block access to such content not only imposes large costs on them, but also stifles online expression and innovation.

Brazil should similarly jettison another prong of its domestic internet agenda—encouraging development and the use of Brazilian-designed and built telecommunications equipment. A concern over hardware “back doors” that permit remote surveillance are driving this policy, much like concern over Chinese espionage have led certain US groups to oppose the use of Chinese-manufactured components in sensitive computer systems. Brazil’s history with similar protectionist policies—like its small electronics industry that has not grown despite massive tariffs on imports—suggests that this policy will fail to create internationally competitive companies that can grow beyond Brazil’s borders.

Together, these misguided policies play into hands of Russia, China, Iran and others, who seek to replace the current multi-stakeholder model with one dominated by governments and the UN. The private sector fuels the internet. Brazil would be wise to redouble its business-friendly policies of expanding domestic internet bandwidth and enhancing international internet interconnectivity. It is not too late for Brazil to break with the enemies of a free and open internet. In doing so, Brazil could become an example for other countries to follow and a true catalyst for the growth of the free and open internet.

Eli Sugarman is a Truman National Security Project Fellow. This article originally appeared on Quartz.