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 – Verizon (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.”
For all these reasons, we believe network neutrality on wireless networks is needed to protect open access to the Internet by millions of Americans.
Resolved, shareholders request the company publicly commit (while not conceding or forfeiting any issue in litigation related to network neutrality) to operate voluntarily 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.
Verizon – Network Neutrality
WHEREAS
A free and open Internet is critical to our nation’s economy and society.
To maintain its many benefits, broad non-discrimination principles must be vigorously applied to the fastest-growing segment of the Internet – wireless broadband networks.
These non-discrimination principles are commonly referred to as “network neutrality.” According to the Congressional Research Service, network neutrality seeks “to ensure equal access and non-discriminatory treatment” for all content.
Network neutrality rules are 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 2010 report by the Institute for Policy Integrity at NYU School of Law, which finds that an open Internet accounts for billions of dollars of economic value for Americans.
The principle of non-discrimination has been an engine for economic growth, empowering millions of America’s small and medium-sized businesses through direct access to the Internet. Musicians and creative artists rely on open Internet principles, for access to audiences.
Federal Communication Commission (FCC) Chairman Genachowski has said that a free and open 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.”
Widespread support of network neutrality is demonstrated by letters to the FCC from thousands of organizations including the American Library Association, National Gay and Lesbian Task Force and Consumer Federation of America.
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 the Pew Internet & American Life Project. In 2010, Pew reported, only 33% of whites accessed the Internet on cell phones compared to 51% of English-speaking 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.
“The digital freedoms at stake are a 21st century civil rights issue,” says Colorofchange.org, an organization representing black Americans. Network neutrality on wireless networks is essential “to avoid unintentionally treating communities of color, people living in rural areas, and the poor as second-class digital citizens,” according to an FCC filing by Latinos for Internet Freedom and a coalition of over 150 organizations representing the poor and communities of color.
Our Company has operated with de facto network neutrality policies for many years. With network neutrality, we believe content innovation will prosper, furthering demand for ubiquitous high-speed Internet access on wireless networks. Conversely, failure to embrace non-discrimination principles will open our Company to potential competitive, legal and reputational risk.
RESOVLED
Shareholders request the company publicly commit to operate its wireless broadband network consistent with Internet 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.
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.
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.
Open MIC ISP Press Release 01-28-09
Open MIC Internet Project Briefing December, 2008
Freedom of Expression at Risk
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.
Click here to read more…
