BRASILIA (Reuters) - A vote on a bill that would force Internet giants like Google and Facebook to keep Brazilians' information inside the country will be delayed until next year over disagreements about its content, a senior lawmaker told Reuters on Wednesday.
The bill would give President Dilma Rousseff powers to order Internet companies to store users' data in local servers, a move seen as response to allegations that the United States spied on her communications and that of thousands of regular Brazilians.
The delay is a temporary relief for Google and Facebook, which oppose a requirement they say would increase costs and erect unnecessary barriers in one of the world's largest Internet markets.
The postponement of the vote stems from disagreements among government allies in Congress over the requirement and a "neutrality" clause that bars telecom companies from charging different rates for Internet speed.
"There are disagreements in the allied base over the neutrality clause and data centers," said the Eduardo Cunha, head of the country's largest political party, the PMDB, in the lower chamber of Congress. "Discussions are stalled. The vote was delayed till next year."
Two other legislative and government sources also said the vote will be delayed until next year to hammer out a deal among the allied parties in Congress, which includes the PMDB.
Lawmakers, who go on holiday recess later this month, will likely resume the vote when they return to work the first week of February. The legislation has been on schedule to be voted on since November.
The controversy ignited by the bill is another example of the tense relations between Rousseff and the private sector, which accuses her government of intervening in sectors that range from oil to banking and electricity.
"The government still supports the idea of having local data centers, but has grown increasingly isolated," said Ronaldo Lemos, a professor at Rio de Janeiro's State University and one of the authors of the original draft.
"The other parties, including allies and the opposition, are widely inclined to not support the demand of having local data centers."
The government says the legislation will protect the privacy of Brazilians after documents leaked by former intelligence contractor Edward Snowden showed the U.S. National Security Agency spied on ordinary Brazilians, the country's biggest company Petrobras and even Rousseff's own communications.
Angered by the revelations, Rousseff canceled a state visit to Washington in October and denounced massive electronic surveillance of the Internet in a speech to the U.N. General Assembly. Other documents leaked by Snowden showed that the NSA also monitored the communications of other world leaders.
Reporting by Alonso Soto; Additional reporting by Estebal Israel; Editing by Vicki Allen