AT&T Shareholder Vote on Network Neutrality Surpasses Critical Threshold
For Immediate Release:
Shares worth more than $11.4 billion voted in favor; Similar votes upcoming at Verizon and Sprint
April 27, 2012: A shareholder proposal calling upon AT&T Inc. (NYSE – T) to publicly commit to network neutrality principles on its wireless networks attracted important support in initial voting results released today at the company’s annual meeting in Salt Lake City.
The proposal, which was voted on for the first time this year, attracted at least 5.9% of the votes cast in this year’s proxy vote at AT&T, according to preliminary results released by the company. That percentage could climb higher in the final tabulation. By garnering support from more than 3 percent of voting shareholders, net neutrality will be assured a continued place on next year’s ballot. Based on the company’s recent share price, the results mean that investors holding stock worth more than $11.4 billion voted in favor of the resolution.
Similar proposals regarding wireless network neutrality are scheduled for votes at the upcoming annual meetings of Verizon Communications (NYSE – VZ) on May 3 and Sprint Nextel Corporation (NYSE – S) on May 15.
“We fully intend to continue pressing these issues which are important to shareholder and public interests, and we look forward to further dialogue with AT&T management,” said Jonas Kron, Vice President of Trillium Asset Management, LLC, who presented the proposal to AT&T shareholders, senior management and board members at the annual meeting.
“Network neutrality has significant implications for the American economy and the large institutional investors whose returns depend on its performance,” according to Laura Campos, director of shareholder activities at the Nathan Cummings Foundation. “The vote at AT&T indicates that investors are beginning to recognize the economic importance of an open and free Internet and vote their shares accordingly.”
Network neutrality is a core principle that has guided the Internet since its inception. This principle enables an open Internet by making sure that companies that provide Internet access treat all content equally—regardless of source, destination or ownership. This prevents a handful of large companies from paying wireless providers premium rates in exchange for faster speeds on their sites than others receive. Without it, consumers risk experiencing a dramatically different Internet, where large corporate sites able to pay premium costs load and operate at fast speeds while smaller newer sites struggle to function and compete with slower speeds. Numerous studies also demonstrate that network neutrality is important to the prosperity of Internet Service Providers and economic growth.
“This vote at AT&T is important because its signals to media and technology companies that investors believe network neutrality is important – comparable to social issues confronting other sectors where investors have successfully pressed for greater accountability,” said Michael Connor, Executive Director of the Open Media and Information Companies Initiative, or Open MIC (www.openmic.org), which helped formulate the shareholder resolutions.
Connor noted that the vote in favor of network neutrality principles compared very favorably to those on proposals regarding other social and environmental issues, in which companies have agreed to adopt carbon emission targets, adopt equal benefit policies for all employee families and disclose political donations. For example, a current campaign led by the Center for Political Accountability, seeking to require corporate disclosure of political spending, started in 2004 with an average 9.1% vote in favor. Since then, 100 major public corporations, including half of the S&P 100, have adopted political disclosure and accountability.
The shareholder proposals at AT&T, Verizon and Sprint were allowed on the proxy ballots following an SEC staff ruling earlier this year which denied “no-action” requests by the companies. The companies had sought to block shareholders from voting on the proposals by arguing, among other things, that network neutrality was not a “significant public policy issue.” The SEC staff rejected that argument in view of what it called “the sustained public debate over the last several years concerning net neutrality and the Internet and the increasing recognition that the issue raises significant policy considerations.”
By winning more than three percent of the vote at AT&T, the proposal reached an important qualifying threshold set by the Securities and Exchange Commission (SEC) for inclusion in next year’s proxy voting.
The proposals at AT&T and Verizon were filed by Trillium Asset Management (on behalf of its clients), the Nathan Cummings Foundation, the Benedictine Sisters of Mount St. Scholastica in Atchison, Kansas, and several individual investors including Mike D of the Beastie Boys. The proposal at Sprint was filed by the Nathan Cummings Foundation.
The proposals ask each company to publicly commit to operate its wireless broadband network “consistent with network neutrality principles – i.e., operate a neutral network with neutral routing along the company’s wireless infrastructure such that the company does not privilege, degrade or prioritize any packet transmitted over its wireless infrastructure based on its source, ownership or destination.”
For more information:
Michael Connor, Executive Director, Open MIC, 646-493-9704, mconnor@openmic.org
Jonas Kron, Vice President, Trillium Asset Management, (503) 592-0864, jkron@trilliuminvest.com
Laura Campos, Director, Shareholder Activities, Nathan Cummings Foundation, 212 787 7300 ext. 3615, Laura.Campos@nathancummings.org
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Trillium Asset Management, LLC is the oldest independent investment advisor devoted exclusively to sustainable and responsible investing. With over $1 billion in assets under management, Trillium has been managing equity and fixed income investments for high net worth individuals, foundations, endowments, religious institutions, and other nonprofits, since 1982. A leader in shareholder advocacy and public policy work, Trillium’s goal is to deliver both impact and performance to its investors.
The views expressed are those of the authors and Trillium Asset Management, LLC as of the date referenced and are subject to change at any time based on market or other conditions. These views are not intended to be a forecast of future events or a guarantee of future results. These views may not be relied upon as investment advice. The information provided in this material should not be considered a recommendation to buy or sell any of the securities mentioned. It should not be assumed that investments in such securities have been or will be profitable. To the extent specific securities are mentioned, they have been selected by the authors on an objective basis to illustrate views expressed in the commentary and do not represent all of the securities purchased, sold or recommended for advisory clients. The information contained herein has been prepared from sources believed reliable but is not guaranteed by us as to its timeliness or accuracy, and is not a complete summary or statement of all available data. This piece is for informational purposes and should not be construed as a research report.
Trillium Wins Significant Victory in Net Neutrality Fight
Trillium Asset Management and other socially responsible investors have won a significant victory in the fight for net neutrality. After years of denial, the Securities and Exchange Commission (SEC) ruled that investors will have the opportunity to press Internet Service Providers (ISPs) AT&T, Verizon and Sprint to adopt policies that would insure their neutral handling of all Internet content regardless of the sender, recipient or nature of the content.
The companies had sought to block shareholders from voting on the proposals by arguing, among other things, that network neutrality was not a “significant public policy issue.”
The SEC rejected that argument in view of “the sustained public debate over the last several years concerning net neutrality and the Internet and the increasing recognition that the issue raises significant policy considerations.” Shareholder proposals regarding net neutrality had been successfully blocked in three prior years.
“Wireless networks in many ways represent the future of the Internet and the digital economy – which is why it’s so important that these principles be considered by the companies and their investors” said Farnum Brown, Chief Investment Strategist for Trillium Asset Management.
To read the press release and the SEC’s letter, click here.
Network Neutrality On Wireless Networks – AT&T (2012)
Whereas:
The open (non-discriminatory) architecture of the Internet is critical to the prosperity of our economy and society. Non-discrimination principles are commonly referred to as “network neutrality” and seek to ensure equal access and non-discriminatory treatment for all content.
As President Obama and Federal Communication Commission Chairman Genachowski have pointed out, an open Internet plays a pivotal role in solving critical national problems such as healthcare, education, energy, and public safety and is necessary “to preserve the freedom and openness that have allowed the Internet to become a transformative and powerful platform for speech and expression.”
Network neutrality rules are also needed to “facilitate the growth of the Internet and give private companies the correct incentives to continue investing in this significantly valuable good,” according to a January 2010 report by the Institute for Policy Integrity at New York University. This report and others find that an open Internet accounts for billions of dollars of value for the economy.
We believe this economic and social value is an important factor in the growth of our economy and widely diversified investment portfolios.
Open Internet policies on wireless networks (the fastest growing segment of the Internet) have particular importance for minority and economically disadvantaged communities. People of color access the Internet via cell phones at a much greater rate than their white counterparts, according to a report by the Pew Internet & American Life Project. In 2010, the report found, 33% of whites accessed the Internet on cell phones compared to 51% of Latinos and 46% of African-Americans; 30% of whites sent or received e-mail on cell phones compared to 47% of Latinos and 41% of African-Americans.
In 2011 Pew reported “Smartphone owners under the age of 30, non-white smartphone users, and smartphone owners with relatively low income and education levels are particularly likely to say that they mostly go online using their phones.” It found that almost a third of the “mostly cell” users lack any traditional broadband Internet access. The author of the report concluded, “For businesses, government agencies and nonprofits who want to engage with certain communities, they will find them in front of a four-inch screen, not in front of a big computer in their den.”
According to Colorofchange.org, an organization representing African-Americans, “The digital freedoms at stake are a 21st century civil rights issue.”
Whether or not the proposed merger of AT&T and T-Mobile is completed, network neutrality principles on wireless networks are needed to protect open access to the Internet by millions of Americans.
Resolved:
Shareholders request the company publicly commit to operate its wireless broadband network consistent with network neutrality principles – i.e., operate a neutral network with neutral routing along the company’s wireless infrastructure such that the company does not privilege, degrade or prioritize any packet transmitted over its wireless infrastructure based on its source, ownership or destination.
Investors to AT&T: Let Shareholders Vote on Open, Free Internet Access for All
October 26, 2011
NEW YORK – Shareholders of AT&T Inc. have filed a proposal calling for the company “to publicly commit to operate its wireless broadband network consistent with network neutrality principles” that would maintain open access to the Internet on wireless networks.
The filing comes only weeks before implementation of new Federal Communications Commission rules on network neutrality that provide a broad exemption for wireless broadband networks – the fastest growing segment of the Internet.
AT&T has sought in the past to block shareholders from voting on network neutrality issues. A similar shareholder proposal on wireless networks was excluded from AT&T’s 2011 proxy ballot following a Securities and Exchange Commission staff ruling that net neutrality was not a “significant public policy issue.”
The latest AT&T proposal has been filed by institutional investors including the Nathan Cummings Foundation as well as individual investors including Mike D of the Beastie Boys. Unless the proposal is blocked again, it’s expected to be voted on at the company’s annual meeting in April 2012.
“Net neutrality is clearly a material issue of import for AT&T and for the whole country, which is why it’s critical that shareholders be heard,” said Farnum Brown, Chief Investment Strategist for Trillium Asset Management, LLC, an independent investment firm with more than $900 million under management, which represents some of the filers.
According to Laura Campos, director of shareholder activities at the Nathan Cummings Foundation, “This issue has important implications for both social and economic justice and long-term shareholder value. As a shareholder, the Foundation is concerned that over the longer-term, a failure to operate its wireless broadband network in accordance with the principles of network neutrality could negatively impact AT&T’s market share and damage its reputation with consumers.”
The AT&T shareholder proposal cites research by the Institute for Policy Integrity at New York University which concluded that an open Internet accounts for billions of dollars of economic value for Americans.”This economic and social value is an important factor in the growth of our economy and widely diversified investment portfolios,” the proposal states.
The proposal also notes that open Internet policies on wireless networks have particular importance for minority and economically disadvantaged communities. People of color access the Internet via cell phones at a much greater rate than their white counterparts, according to a report by the Pew Internet & American Life Project. “The digital freedoms at stake are a 21st century civil rights issue,” says Colorofchange.org, an organization representing African-Americans, which is cited by the shareholders.
The shareholder proposal calls on AT&T to proactively ensure that its wireless networks remain open and provide equal access and non-discriminatory treatment for all content.
“Maintaining the existing system of net neutrality for our mobile networks is a win-win – its good for economic growth and good for the principles of free expression that underpin our democracy – the greatest platform the world has known for sustainable economic growth,” said Jonas Kron, Deputy Director for Shareholder Advocacy at Trillium.
The shareholder initiative at AT&T was organized by Open MIC – the Open Media and Information Companies Initiative – a nonprofit organization that seeks to inform corporations’ responsible media management practices. “Net neutrality is necessary to insure competition, entrepreneurship, innovation, and free expression in the digital economy,” said Michael Connor, Open MIC’s Executive Director. “That’s why it is so important that the investor voice be heard.”
The complete text of the AT&T wireless network neutrality proposal is available on the Open MIC web site and can be downloaded here (PDF).
For more information about recent net neutrality issues, visit www.openmic.org.
The Open Media and Information Companies Initiative – Open MIC – is a non-profit organization working to promote a vibrant, diverse media ecosystem through market-based solutions. Founded in late 2006, Open MIC is a project of the Tides Center, a 501(c)(3) non-profit organization.
For more information, contact:
Michael Connor
Executive Director
212-537-9401
mconnor@openmic.org
www.openmic.org
Verizon – Free and Open Internet
WHEREAS
The Internet has become a defining infrastructure of our economy and society; Internet Service Providers like Verizon forge rules that shape, enable and limit Internet use.
Federal Communication Commission (FCC) Chairman Genachowski recently noted that a free and open Internet is an “unprecedented platform for speech, democratic engagement, and a culture that prizes creative new ways of approaching old problems.” A free and open Internet, he said, demands Americans’ attention because the Internet must play a critical role in solving the “great challenges [we face] as a nation right now, including health care, education, energy, and public safety.” He asserted: “We have an obligation to ensure that the Internet is an enduring engine for U.S. economic growth, and a foundation for democracy in the 21st century.”
These issues have attracted considerable public interest since at least 2005 when the FCC first articulated open Internet principles and may present financial risk to the company.
The widespread interest in a free and open Internet (so-called “net neutrality”) is echoed by recent letters from hundreds of organizations including the American Library Association, Writers Guild of America, West, National Gay and Lesbian Task Force, and Consumer Federation of America. As a letter from minority advocates put it, applications of net neutrality principles “to wireline and wireless networks are essential for extending the proven benefits of the Internet to poor people and people of color.”
Hundreds of federal and state legislators have written to the FCC on these issues. Congress is now considering the Internet Freedom Preservation Act and the Internet Freedom Act. The FCC is also considering a proposed rule.
Verizon’s opposition to the FCC’s proposed rule-making was formulated and announced even before the proposed changes were made public in October 2009. One day earlier, Verizon CEO Ivan Seidenberg told an industry convention it would be a “mistake, pure and simple” for the FCC to impose a “burdensome regime” of regulation on the Internet. In contrast, the CEO of Qwest Communications, speaking one week after the FCC announcement, told Wall Street analysts that Qwest is not concerned with the issue and believes the rules which might be put in place will be adequate.
The Washington Post and OpenSecrets.org report that Verizon is among the most active lobbyists on these issues.
We believe independent members of the Board should give the Company’s position on this issue a second look to insure that the Company is adequately considering its social obligations as well as the risks and opportunities presented by this issue.
RESOLVED
Shareholders request a committee of independent directors publish a report, by August 2010 at reasonable cost and excluding confidential information, re-examining our Company’s policy position and discussing how the Company could address the challenges presented by the free and open Internet issue in the context of Verizon’s corporate social responsibility, its reputation, and the impact of the company’s policies on customers, communities, and society.
AT&T – Free and Open Internet
WHEREAS
The Internet has become a defining infrastructure of our economy and society; Internet Service Providers like AT&T forge rules that shape, enable and limit Internet use.
Federal Communication Commission (FCC) Chairman Genachowski recently noted that a free and open Internet is an “unprecedented platform for speech, democratic engagement, and a culture that prizes creative new ways of approaching old problems.” A free and open Internet, he said, demands Americans’ attention because the Internet must play a critical role in solving the “great challenges [we face] as a nation right now, including health care, education, energy, and public safety.” He asserted: “We have an obligation to ensure that the Internet is an enduring engine for U.S. economic growth, and a foundation for democracy in the 21st century.”
These issues have attracted considerable public interest since at least 2005 when the FCC first articulated open Internet principles and may present financial risk to the company.
The widespread interest in a free and open Internet (so-called “net neutrality”) is echoed by recent letters from hundreds of organizations including the American Library Association, Writers Guild of America, West, National Gay and Lesbian Task Force, and Consumer Federation of America. As a letter from minority advocates put it, applications of net neutrality principles “to wireline and wireless networks are essential for extending the proven benefits of the Internet to poor people and people of color.”
Hundreds of federal and state legislators have written to the FCC on these issues. Congress is now considering the Internet Freedom Preservation Act and the Internet Freedom Act. The FCC is also considering a proposed rule.
In October 2009, AT&T’s Senior Executive Vice President – External and Legislative Affairs wrote to all U.S. based managers. After rightly noting the importance of the Internet for economic and job growth, he encouraged them and their families and friends to write to the FCC and urge “the FCC not to regulate the Internet.” In contrast, Qwest’s CEO has told Wall Street analysts that Qwest is not concerned with the issue and believes the rules which might be put in place will be adequate.
The Washington Post and OpenSecrets.org report that AT&T is the most active lobbyist on these issues.
AT&T’s Board has a Public Policy Committee authorized “to review the corporate policies and practices in furtherance of AT&T’s corporate social responsibility, including public policy issues affecting AT&T, its shareholders, employees, customers and the communities in which it operates; to determine how Company practices impact public expectations; and to provide guidance and perspective to the Board and management on these issues.”
RESOLVED
Shareholders request the Public Policy Committee publish a report, by August 2010 at reasonable cost and excluding confidential information, re-examining our Company’s policy position and discussing how the company could address the challenges presented by the free and open Internet issue in the context of AT&T’s corporate social responsibility, its reputation, and the impact of the company’s policies on customers, communities, and society.
