For U.S. tech companies, the fallout from revelations about breaches in system security and lack of user privacy has become a legitimate business problem. Mistrust is a competitive disadvantage, as companies from Cisco (CSCO) and Microsoft (MSFT) to Google (GOOG) and Facebook (FB) try to expand around the world, especially in fast-growing emerging markets where politicians are happy to promote local businesses as alternatives. In an effort to keep from losing access, representatives of those companies and many others met with governments and universities from around the world at the NETmundial conference in São Paulo last week. The goal was to chart an international course for how the Internet should be managed and for what level of privacy nations and corporations should be able to guarantee.
As NETmundial began with ministers from dozens of countries mingling with the creators of the Internet, Russia and host Brazil illustrated opposing models for Internet governance. That day, Russia’s parliament passed a package of laws that prohibit Internet companies from doing business there unless they agree to keep data obtained in-country on local servers for at least six months. Later in the day, Brazilian President Dilma Rousseff signed into law the Marco Civil da Internet, essentially an Internet bill of rights that guarantees freedom of expression, bars Internet service providers from discriminating against certain websites for financial or political reasons, and doesn’t require local data centers. (Although Rousseff originally demanded the latter measure, it was dropped in the legislature after months of lobbying by Internet companies.)
The Brazilian law also protects companies including Google and Facebook from liability for content on their websites. Vinton Cerf, a creator of the Internet’s communication language who’s now an executive at Google, says it’s an “exclamation point” for the conference, “an important discussion about how we should behave in this Internet environment, how businesses should behave, and how people should behave.”
The U.S. government officially co-hosted the conference with Brazil, Germany, and nine other governments. In March, the U.S. Department of Commerce said it would relinquish its unilateral control over the Internet Corporation for Assigned Names and Numbers (Icann), the Los Angeles-based organization that assigns website addresses. With Rousseff calling NSA spying a human-rights violation, the White House’s cybersecurity coordinator, Michael Daniel, had to strike a delicate balance, building consensus and encouraging other countries to mirror Brazil’s openness to foreign corporations without going so far as to strengthen language against mass surveillance or explicitly defend net neutrality. These two issues emerged as the most controversial at the conference, especially after the Federal Communications Commission appeared to endorse the creation of Internet “fast lanes” on April 23. Tim Bajarin, president of technology consulting firm Creative Strategies in San Jose, says the industry was watching the debate in São Paulo very closely for its influence on emerging markets.
Unlike most summits on Internet governance, NETmundial appeared to treat contributions from governments, corporations, academics, and advocacy groups equally. There were four microphones in the main hall at São Paulo’s Grand Hyatt Hotel, each labeled with construction paper color-coded for the different stakeholder groups. Advocates from nonprofits lined up beside cabinet-level ministers to offer tweaks to clauses in the outcome document; company executives and law professors discussed bridging the digital divide over lunch.
Still, the U.S. got pretty much what it wanted from the document the conference produced—a nonbinding statement in favor of consensus-based decision-making that didn’t harshly condemn mass surveillance or include the words “net neutrality.” Brazil’s communication minister, Paulo Bernardo, says Rousseff agreed it was better to compromise on the document than to risk discussions falling apart. Daniel, who led the U.S. delegation, says that from the White House’s perspective, “NETmundial was a huge success.”
The final resolution says Icann should be under international control by September 2015 and supports funding additional staff for the United Nations-created Internet Governance Forum. Russian and Cuban delegations rejected the results, alleging that the conference wasn’t transparent or collaborative enough, and a representative from India said his country wanted more time to analyze the resolution. China’s delegates said during discussions that they support a more UN-centric approach that puts more control of the Internet in the hands of governments.
Despite these notes of protest, the resolution’s incremental moves toward multilateral Internet regulation may help dissuade other countries from siloing off the Web within their borders. And the Marco Civil’s open door to U.S. tech companies was good news for the likes of Cisco and Google. According to the McKinsey Global Institute, Brazil is one of the top two countries with growth potential online. Of course, the other one is Russia.
