This* is an article about the legal regulation of cyberspace, under a theoretical approach. This text is the basis of my presentation on October 2nd, 2004, at the "Internet and the Law - A Global Conversation", a conference held at the University of Ottawa, in Canada, when we gave a talk about the Internet and Regulation in Brazil.
We will review the dogmatic function of the law that we take as inherent to the law, despite to the legal system it belongs to. This article presents the dogmatic function of law as an efficient regulatory model for cyberspace. In fact, we think that the challenge for cyberlaw is to identify the correct legal dogmas that will regulate cyberspace, accordingly and in respect to the culture and the tradition of each country.
After presenting the theory, this paper shifts to the identification of the application of the dogmatic function of law, under a Brazilian legal perspective.
This text basically covers the origins of telecommunications law in Brazil and how it was adapted to regulate the Net.
Brazilian net surfers are well ranked among international Internet users.1 That fact could sound interesting to foreigners. How could a developing country, such as Brazil, show relatively good Internet use rates? The answer may be in the past history of Brazilian high inflation rates.
Electronic transactions have not been something new for the average person in Brazil. That fact has some historical roots in the late seventies and early to mid eighties. One of the most important reasons for the acquaintance of the Brazilian people with the on line world is indeed an economical issue.
During the second half of the last century, the Brazilian economy experienced very high inflation rates. Due to many economical factors that are beyond the scope of this text, the inflation kept rising throughout the seventies and the eighties. Inflation rates reached a tremendous rate of 80% (eighty per cent) a month in the early nineties.
A high inflation economy makes paper money a useless asset. Therefore, money was mostly kept in the banks, where there was some protection against the day-to-day devaluation of the currency. Brazilian banks developed their electronic networks very rapidly during the eighties. Debit cards and ATM machines were spread throughout the country. Money transfers were easily made throughout the vast territory of the country, even from Southern Brazil to the most far away regions of the West or the Northern region.
Brazilians had to learn how to make electronic transactions to avoid great losses due to the day to day devaluation of the currency. Of course, that was a very good reason for people to get involved with the on line world.
If, on the one hand, the electronic sector was relatively developed in Brazil, during the last decades of the past century, on the other hand, telecommunications was really a problem. The telecommunications system had been working slowly under a state-owned public monopoly model. The Federal Government controlled all telecom companies but had little or almost no money to invest in the services. The consequence was a very low offer of phone lines to consumers. Besides that, phone lines were highly expensive in the market.
The change for the telecom market came in the mid nineties, when the market was deregulated. Actually, an amendment2 to the Brazilian Constitution of 1988 was required to break-up the public monopoly of the Federal Government. With the deregulation of the telecom market, private investment, both, Brazilian and foreign, became welcome in the country. Brazilian consumers, of course, rapidly felt the good results of the privatization. Telephone lines had their very high prices lowered to something very close to zero in less than six or seven years.
The good news from the telecom sector and the experience that Brazilian consumers had with electronic banking led to a wide growth of the Internet in the country. Not only the private sector, but also most of the government agencies felt comfortable in investing time and resources to develop the Brazilian ".br" branch of the Internet.
The public sector did also contribute a lot to the development of the on line world in Brazil. A Federal Statute of 2000 created a fund of 1% of the gross revenue of telecom companies for the development of Internet access for schools and public libraries.3 At this point in time, the public sector has turned its attention to fostering the use of open software.
The country had its first electronic election for president in 1994. At this point in time, ten years later, almost all of the Brazilian states have adopted e-voting machines and paper ballots have become something of the past.
Brazilians tax payers are used to filing their tax returns to the Federal Government through the Internet. The system was made available during the mid nineties and, at this point in time, most of the tax payers send their tax returns on line. Besides that, the Brazilian "IRS" has become very efficient in providing on line services to tax payers such as on line tax compliance certificates.
Brazilian courts have also taken a positive approach towards the use of cyberspace. Some circuits of the Federal Justice have implemented electronic lawsuits.4 Courts are analyzing projects that could lead to the wide use of the Internet as a way to make judges closer to the people, especially in the remote areas of the North (usually of difficult access due to the Amazon forest).
In the academic legal field, researches began during the mid nineties. The law of the on line world became a legal discipline. Actually, the discipline "Virtual Law"Page 32(Cyberlaw) was first taught for LL.B. students in 1997 as a mandatory discipline at Faculdade de Direito Milton Campos.5 Cyberlaw turned to be a regular discipline offered in most of the Brazilian first tier law schools and the scholarship has grown a lot in the area.6
The law of the on line world in Brazil addresses legal issues related to the use of cyberspace. Consumer laws, on line torts, cyber crimes, privacy issues, freedom of expression and the legal protection of intellectual property are some of the legal issues that Cyberlaw teachers and law students deal with in Brazil.
This Article covers the dogmatic theory for cyberspace regulation and some of the most relevant issues of the regulation of the Internet in Brazil. Due to the fact that the scope of the article could become too wide, we will focus on two separate main issues, divided in two the parts of the text.
The first part of the Article presents a theoretical analysis of the law of cyberspace. Item A of part one identifies the existence of some academic schools of regulation of the on line world. We will present the dogmatic function of law as an inherent characteristic of the legal regulation. After explaining our approach or the dogmatic function of law, we will present it as a model of regulation for cyberspace and we will take the position that legally choosing the right dogmas for each society is the best way to regulate cyberspace. After that study of the theory of cyberlaw, we turn to the application of the theory for the law of the on line world in Brazil. Item B of the first part will review the telecommunications law and policy in Brazil, from the state- owned public monopoly times to the legal and practical effects of the deregulation of the market (pos the 1995 Amendment of the Brazilian Constitution), when the first Brazilian Agency was created. In item C, at the end of the first part of this Article, we will explain the legal dogmatic framework that the Internet has had in Brazil, since its beginning in the mid nineties. Finally, we will demonstrate that the Internet is not a public service in Brazil and, therefore, the Internet is legally considered to be a private enterprise in the country. The legal consequences of that dogmatic regime for the Internet in Brazil will be briefly addressed at the very end of the first part.
The second part of the Article deals specifically with some of the most important Brazilian legal dogmas regarding the Internet in Brazil. Item A of the second part addresses the regulation of the Internet Services Providers in Brazil, under a tax perspective. It is an interesting legal analysis because it demonstrates how courts are still struggling with the law in order to determine what legal dogma will be applied to the ISPs in order to tax their services. Items B and C deal with e-commerce. In doing so, this Article presents the importance of Consumer Laws in the Brazilian regulation of e-commerce. We will show that Brazilian Consumer Laws have grown Page 33in importance as a source of legal dogmas for cyberspace in Brazil. Item B of the second part will also make the policy analysis of the Panasonic Case, decided by the Superior Court of Justice in Brazil. Even though it is not a cyberlaw case, it is important to analyze the Panasonic Case due to the fact that the Brazilian Consumer Law was applied to a transaction between a Brazilian consumer and an American offeror. This application of the Brazilian Consumer Law to transactions occurred outside the boundaries of Brazil may be a precedent for applying the same law in electronic...