Spying on Rousseff Has Brazil Leading Internet Road Map

(Corrects Ronaldo Lemos’s title in the 11th paragraph.)

As spying disclosures lead to questions about U.S. stewardship of the Internet, Brazil is trying to steer a new direction of governance for a technology responsible for one-fifth of the developed world’s economic growth over the past five years.

Representatives from Cisco Systems Inc. (CSCO), Microsoft Corp. (MSFT) and dozens of other companies, governments and universities are meeting in Sao Paulo today to chart a road map for how the Internet should be managed and what level of privacy should be guaranteed. It’s the first such gathering since the U.S. was accused of intercepting communications from world leaders including Brazilian President Dilma Rousseff.

Brazil’s template for the world: an Internet-rights bill known as Marco Civil which Rousseff signed into law during the opening session of the conference. The legislation is welcomed by companies because it protects intermediaries like Google Inc. and Facebook Inc. (FB) from liability for content on their websites, and it defends user rights like free expression that are essential to Internet business models.

Marco Civil is an “exclamation point” for this week’s NETMundial conference, which is an important discussion “about how we should behave in this Internet environment, how businesses should behave, and how people should behave,” Vinton Cerf, a creator of the Internet’s communication language who is now chief Internet evangelist for Google, said in an interview.

Latin America’s largest economy is among the first nations to pass a digital bill of rights amid calls in its region and in the European Union for more global supervision of the Internet following an increase in cyber-attacks, censorship in some nations and accusations of government spying.

U.S. Participation

NETMundial was scheduled after Rousseff met with Fadi Chehade, chief executive officer of Los Angeles-based Internet Corporation for Assigned Names and Numbers to discuss the globalization of Internet governance. As part of this process, the U.S. Commerce Department’s National Telecommunications and Information Administration said last month that ICANN, which assigns website addresses, would aim to transition from U.S. government control to international oversight within 18 months.

Brazil is co-hosting the conference with the U.S., Germany and nine other governments. President Barack Obama is sending Michael Daniel, his White House cybersecurity coordinator, to represent the U.S.

“The U.S. government looks forward to collaborating with hundreds of other stakeholders at NETMundial to develop a shared vision for the multistakeholder model of Internet governance,” the State Department said in a statement yesterday.

Dominant Legacy

NETMundial received 188 documents as contributions from individuals and organizations in 79 countries, including Google and Facebook, as well as the governments of Iran and Russia. Iran’s contribution said the “hottest issue” in Internet governance is how to balance the functionality of the private sector with the legitimacy of “high involvement of governments,” with no one country retaining a “legacy” of dominance.

Marco Civil will be a model for the conference, not just for its content, but also for the way in which it was composed. The bill’s authors received contributions from hundreds of individuals and organizations since it was first proposed in 2009.

Brazil will try to show off the Marco Civil effort and say, ‘This is what we did internally, it actually works, and we would like it to be considered globally,’” said Ronaldo Lemos, a law professor at the Rio de Janeiro State University and director of the Institute for Technology and Society.

Snowden Leaks

Today’s opening ceremony of NETMundial featured Rousseff, as well as Tim Berners-Lee, the British computer scientist credited with inventing the World Wide Web. Ministers from at least 30 nations, including from France, India, Russia, South Korea and Sweden, are scheduled to attend.

Google, Facebook and other Internet companies continue to grapple with the response of countries around the world to U.S. National Security Agency spying, revealed in document leaks by former government contractor Edward Snowden. Rousseff called for an “international Marco Civil,” in her speech at the United Nations in September and described the accusations of NSA spying as a human rights violation.

Rousseff canceled a state visit to the U.S. and personally requested a measure that would have required companies to host data from Brazilian users within the country’s borders. After six months of political discussions and lobbying from Internet companies, the data center measure was dropped as a condition for the bill’s approval in the lower house.

Open Internet

The industry is watching NETMundial very closely for its influence in emerging markets, said Tim Bajarin, president of technology consulting firm Creative Strategies Inc. based in San Jose, California.

“When the Internet is so critical to your business model, you have be in place at these conferences to be kept abreast of developments and defend your interests,” Bajarin said by phone. “The number one thing companies want is to keep the Internet open and free with the least restriction possible.”

The Internet accounted for 21 percent of economic growth over the past five years in developed countries, according to a 2011 report from the McKinsey Global Institute. It cited Brazil, Russia and Italy as countries with strong potential for Internet growth.

Brazil Leadership

The collaborative process by which Marco Civil was written gives the technology sector and users a voice in legislation that would otherwise be left up to governments with more interest in security and control. The preparation and outcome document of the conference include “bottom up” contributions, similar to Marco Civil’s composition, Virgilio Almeida, the NETMundial chairman said on a conference call.

Cerf said he hopes the conference outcome is not another institution, but rather strengthens existing organizations to govern an evolving and important tool for social and economic development. He said just as the world has rules for the “offline world” it also needs rules for the online world.

After this conference, Cerf will continue taking part in a panel on Internet cooperation that includes representatives from ICANN, companies, governments and the United Nations. The group has met twice since November and will meet again in Dubai next month.

“The Internet has always been a collaborative environment, that’s how it arose, that’s how it continues to evolve, and that’s how we’ve been managing it,” Cerf said. “It’s not a central authority, it is groups of people, millions of them by now, that collaborate in order to produce the network we all use.”

To contact the reporter on this story: Anna Edgerton in Brasilia at aedgerton@bloomberg.net

To contact the editors responsible for this story: Romaine Bostick at rbostick@bloomberg.net; Helder Marinho at hmarinho@bloomberg.net

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