Investors in AT&T, Verizon and Sprint will finally have an opportunity to vote on shareholder proposals which call on the companies to commit to network neutrality principles that would maintain open access to the Internet on wireless networks.
The proposals, which will be considered at the companies’ upcoming annual meetings, will proceed as the result of a Securities and Exchange Commission staff ruling which denied “no-action” requests by AT&T, Verizon and Sprint.
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.” Shareholder proposals regarding net neutrality had been successfully blocked in three prior years.
The proposals at AT&T and Verizon were filed by 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.”
Federal Communications Commission rules on network neutrality that were implemented in December 2011 provide a broad exemption for wireless broadband networks – the fastest growing segment of the Internet.
“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 Corporation, an independent investment firm with more than $900 million under management, which represents some of the filers.
Laura Campos, director of shareholder activities at the Nathan Cummings Foundation, said, “This issue has important implications for both social and economic justice and long-term shareholder value. As a shareholder in these companies, the Foundation is concerned that over the longer-term, a failure to operate their wireless broadband networks in accordance with the principles of network neutrality could negatively impact their market shares and damage their reputations with consumers.”
Research cited in the shareholder proposals includes a study 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 Institute says.
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.