I’ve previously reported that Brazilian President Dilma Rousseff’s initiative to respond to extensive NSA internet spying on her country by, among other things, requiring countries doing business in Brazil to store their data there, has stirred up negative comment among so-called experts, mostly based in the US (comment #26 here). They have invoked the bogeyman of “balkanization” of the internet, a concept originally introduced by the head of Google.

There are somewhat different objections in the home country, but they do exist. Folha de São Paulo introduces them in an article posted on Wednesday whose title translates as “Brazilian response to internet spying can go wrong, industry says.” It begins (corrected Google translation):

For Brazil’s technology companies, the government’s decision to target companies in response to American espionage is as smart as sending an angry email in the heat of an argument.

President Dilma Rousseff’s plan to force Internet companies to store user data within the country will not stop at concerns about cyber-security in Brazil, and can increase costs and jeopardize future investment in an important emerging market for companies like Google, Facebook and Twitter, analysts and industry executives said.

“You can end up having the opposite than intended effect, and drive away companies wanting to do business in Brazil,” said Ronaldo Lemos, a professor at the State University of Rio de Janeiro (UERJ), who helped formulate Brazil’s internet rules.

The opinion of Lemos, an internationally recognized expert on IT and intellectual property law, is not lightly dismissed. Nor is he a pushover for the big telecoms, having previously opposed a 2011 deal for Foxconn to build iPads in Brazil. And a little later the article says:

An industry source, speaking on condition of anonymity because of the sensitivity of the issue, said that many companies are still waiting to see the law and how it will be implemented, before deciding whether to continue with plans to invest in the country. Some might even leave Brazil .

“It’s a horrible idea,” said the source, “but even if the government knows this, it feels a need to keep pushing and send a strong political signal.”

To be sure, the phrasing “speaking on … of the issue” raises alarm bells at least to this reader: it sounds like the US government floating a trial balloon by the familiar technique of leaking. And for their part the Rousseff forces show no signs of backing down. Their point man in the legislature Alessandro Molon, the rapporteur of the Civil Internet Framework, is quoted in the article as saying, “I do not believe that these companies will stop their lucrative activities in Brazil,” since building local centers would be a small cost for them.

And another official, the Secretary for Information Technology Policy of the Ministry of Science and Technology, avers that Brazil is the second largest market for Facebook even though it has no infrastructure in the country, thus implying that the good Mr. Zuckerberg could spare some of his millions to build a bit there.

The article is quite long and also speaks of the possibility of tax incentives to get telecoms to invest in Brazil, as well as the pros and cons of a proposed fiber optic cable from the port of Fortaleza to Vladivostok, Russia, linking the other BRICS countries along the way.

And this little tidbit: It turns out that on a recent trip to the US the Justice Minister proposed that requests for surveillance in Brazil be referred to courts in Brazil instead of the FISA court; of course this idea was rejected.

But Rousseff’s initiative itself is one of two active acts of international resistance I know to what the NSA has been up to abroad, the other being an effort in the European Parliament, spearheaded by Dutch member Sophie in’t Veld, to change certain sharing of banking data between the European Union and the US. The Brazilian case is probably the weightier, and it stands to reason that powerful interests will try to thwart the initiative.