Sept. 11 (Bloomberg) -- Brazil’s government is considering developing locally made network equipment that phone companies would be required to use as a defense against foreign spies, Communications Minister Paulo Bernardo said.
The measure would be designed to protect information privacy, in response to allegations that the U.S. National Security Agency used software to access communications between Brazil President Dilma Rousseff and staff members, Bernardo said today in an interview.
“We could require the whole Brazilian market to use this equipment,” Bernardo said. “This would apply to businesses, communication networks and telecommunication companies that operate in Brazil.”
The plan would create a challenge to companies such as Cisco Systems Inc. that have identified Brazil as a market ripe for expansion. Brazil follows Germany in calling for a home- grown industry to avoid U.S. surveillance.
The spying allegations were made earlier this month on Brazil’s most-watched TV news magazine, Fantastico, by American journalist Glenn Greenwald.
Telecommunications regulator Anatel said last week that it’s investigating contracts between Brazilian operators and foreign companies. The focus is on the “main companies with the largest client bases,” the agency said.
Brazil’s largest phone companies include Rio de Janeiro- based Oi SA and the local units of Madrid-based Telefonica SA, Mexico City-based America Movil SAB and Milan-based Telecom Italia SpA. Oi has said it acts strictly in accordance with Brazilian laws on privacy, while the other carriers have declined to comment on the regulatory probe.
Tougher Penalties
Rousseff has asked for legislation to increase penalties for companies that worked with the security agency. This could include fines or even revoking licenses to operate in Brazil, Bernardo said today.
“Espionage is illegal, regardless of who does it,” Bernardo said. “We’re discussing the possibility of penalizing companies that collaborate in this kind of spying scheme, which could be included in the legislation.”
The minister said Rousseff will mark Internet privacy legislation currently in the lower house as urgent, to be voted on within 45 days.
Thomas Shannon, the U.S. ambassador to Brazil, had denied a report on spying allegations by newspaper O Globo in July, telling officials that the U.S. didn’t spy on Brazilian citizens and only collects records of phone calls or e-mail messages abroad to pursue suspected terrorists.
“It’s clear that the information we received from the Americans was false,” Bernardo said. “That conversation was all lies.”
Personal Responsibility
After meeting with Barack Obama last week, Rousseff said the U.S. president took personal responsibility for the spying allegations. The two leaders met informally at the G-20 summit in St. Petersburg.
Brazil Foreign Minister Luiz Figueiredo is in Washington today to speak with National Security Adviser Susan Rice about the NSA’s activities. Rousseff is still deciding whether to go through with a scheduled state visit to Washington in October.
“‘The truth is we see this as an affront to our constitution,’’ Bernardo said. ‘‘We have to make it clear how we will respond.’’
--Editors: Crayton Harrison, Niamh Ring
To contact the reporter on this story: Anna Edgerton in Brasilia at aedgerton@bloomberg.net
To contact the editor responsible for this story: Helder Marinho at hmarinho@bloomberg.net
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