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.
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.
Open MIC Announces Significant Shareholder Votes on Internet Privacy and Freedom of Speech
Investors in two major U.S. Internet Service Providers – CenturyTel, Inc. and EarthLink, Inc. – voted in substantial numbers in favor of a first-time shareholder resolution that highlighted the importance of Internet management practices and their impact on Internet privacy and freedom of expression. The resolutions, which were filed and voted on for the first time this year, attracted 30.49% of the vote at CenturyTel and 9.25% at EarthLink. Taken together, the votes mean that investors controlling stock worth more than $900 million voted in favor of the resolutions at the two companies.
“This is the kind of vote that grabs the attention of corporate management.” said Jonas Kron, Senior Social Research Analyst at Trillium Asset Management Corporation, which filed the resolution at CenturyTel. “When almost one out of three shareholders expresses this kind of concern, it’s time for the Board to re-examine how it will attend to the policy challenges, and opportunities, it faces. We hope CenturyTel will take this occasion to become a leader on privacy and freedom of speech.”
RiskMetrics calls Open MIC Internet Project “biggest new campaign in the human rights arena for the 2009 U.S. proxy season.”
Risk Metrics Group (RMG), the nation’s largest and most influential proxy advisory firm, provides research to some of the world’s largest and most important financial institutions about the environmental and social issues shareholders raise in proxy statements. It’s guidance to large pension funds often determines the fate of shareholder proposals filed by Trillium Asset Management and our fellow shareholder activists. We were, therefore, very pleased when RMG recently wrote a lengthy piece on the Open MIC shareholder initiative describing it as the “biggest new campaign in the human rights arena for the 2009 U.S. proxy season.” The story discusses the importance of Internet service provider (ISP) network management practices to privacy and freedom of speech and includes comments from our colleague Pat Doherty, director of corporate social responsibility (CSR) for the New York City Comptroller’s Office and a lead member along with Trillium Asset Management of the Open MIC effort this year. He told RMG, “This is a long-term campaign and serious policy issue for business and society as well, in our country and others.” He went on to say that ISP filtering “has to be watched very closely.” You can read the full story here.
Open MIC, founded by Trillium, files shareholder resolutions with 10 Internet Service Providers
Professor Jeffery Rosen recently wrote in the New York Times, “As more and more speech migrates online, to blogs and social-networking sites and the like, the ultimate power to decide who has an opportunity to be heard, and what we may say, lies increasingly with Internet service providers, search engines and other Internet companies…”
Members of a coalition of investors, lead by Trillium, have filed shareholder resolutions with 10 publicly-held U.S. providers of Internet access, urging corporate boards to report on the impact of the companies’ Internet network management practices on public expectations of freedom of expression and privacy.
The investor coalition includes the New York City Pension Funds and socially responsible investment firms Boston Common Asset Management, Calvert Asset Management Company, Domini Social Investments, Harrington Investments and As You Sow.
Seattle Times Publishes Op-Ed by Open MIC and Trillium
The Seattle Times published an Op-Ed by Open MIC and Trillium Asset Management Corporation: “FCC shouldn’t tolerate abuses by Internet’s corporate gatekeepers.”
The Op-Ed challenges Comcast, AT&T and a host of other Internet Service Providers for their secretive, invasive and deceptive practices that compromise consumers’ privacy and freedom of expression.
Open MIC – The Open Media and Information Companies Initiative
On March 11, 2008, Open MIC and the Paley Center for Media hosted a forum in New York on the future of wireless communications. A distinguished panel of speakers examined the emerging wireless business environment, the rules of the road that might evolve for the mobile Internet, and the challenges to ensuring open access for all. You can see video excerpts from the forum here:
On December 20, 2007, The Seattle Times published an op-ed by Trillium Asset Management Corporation Vice President Farnum Brown and Michael Connor, the executive director of Open Mic, a nonprofit working to promote a vibrant, diverse media ecosystem through market-based solutions. Brown and Connor demanded:
COMCAST, Verizon, and AT&T need to come clean.
Those three – and other cable and telephone companies – need to disclose exactly how they decide to restrict the freedom of expression of hundreds of millions of Americans. They need to explain exactly how they decide to limit Americans’ access to the Internet and other information services. As consumers, investors and citizens, we have a right to know.
