Open MIC Internet Project: Shareholder Proposals Move Toward Votes

The Open MIC Internet Project is “the biggest new campaign in the human rights arena for the 2009 U.S. proxy season,” according to a new report by RiskMetrics, the nation’s largest and most influential proxy advisory firm.   

Among other recent developments:

• Votes are coming up soon at EarthLink (May 5) and CenturyTel (May 7) on our shareholder resolutions regarding Internet network management practices and their impact on expectations of freedom of expression and privacy. We urge those of you who hold those stocks to vote in favor of the resolutions.  If you need more information, please let us know.

• Knology, Inc. has agreed to revise the company’s privacy policy by the end of 2009, following a negotiation with the New York City Pension Funds (NYCPF).  As a result, NYCPF has withdrawn its shareholder proposal.  In August 2008, Knology was the focus of a Congressional inquiry regarding its deployment of a behavioral advertising technology based on a technology called Deep Packet Inspection (DPI), which permits service providers to inspect Internet information packets on a large scale.

• While several of the major ISPs successfully sought exclusion letters from the Securities and Exchange Commission on the grounds of “ordinary business,” the issues highlighted in the Open MIC resolution are surfacing more frequently and more publicly.  Deep Packet Inspection technology – which Open MIC focused on in its investor brief earlier this year - was the focus of Congressional hearings held last week (April 23) by the House Subcommittee on Communications, Technology and the Internet.  Subcommittee chairman Rep. Rick Boucher (D– VA) said that while DPI technology can offer benefits, such as helping to manage networks and controlling viruses and worms, “its privacy intrusion potential is nothing short of frightening.”

• The Chief Privacy Officer for AT&T, which only weeks ago fought to exclude a shareholder proposal filed by Trillium Asset Management, told last week’s House subcommittee hearing that “next-generation forms of targeted online advertising – commonly referred to as ‘behavioral advertising’ – raise important privacy issues that are worthy of thoughtful consideration by policymakers and dictate a cautious, consumer-focused approach by industry. To be sure, your further inquiry into these matters is warranted.”

• At least one of the ISPs that fought to exclude our shareholder proposal has subsequently indicated a willingness to engage us in a dialogue regarding their network management practices and public expectations of freedom of expression and privacy.   That discussion is expected to begin soon.

•  A recent in-depth article on the Open MIC initiative by RiskMetrics reported: “Pat Doherty, director of corporate social responsibility (CSR) for the New York City Comptroller’s Office and a lead member of the Open MIC effort this year, told RiskMetrics Group, ‘This is a long-term campaign and serious policy issue for business and society as well, in our country and others.’ He said he expected the Open MIC coalition to continue working to bring attention to the subject, through future shareholder proposals and other activities. ‘This has to be watched very closely,’ Doherty said of the ability of ISPs to filter or review customer content on the Internet.”

For a copy of the report by RiskMetrics, click here.

For background on the Open MIC Internet Project and proposals at EarthLink, Inc. and CenturyTel, Inc., click here .