Investors Representing $190 Billion in Assets Oppose FCC’s Proposed Changes to Net Neutrality Rules

Filing argues the agency’s position is “fundamentally flawed” and at odds with public data provided by major Internet Service Providers

A group of 20 investment advisors, investment management firms and foundations with broadly diversified stock portfolios today called upon the Federal Communications Commission to maintain current rules that support the principle of network neutrality on the Internet.

The investors, representing approximately $190 billion in assets and Assets Under Management (AUM), argued in a filing with the FCC that a rulemaking proposed in April 2017 - which would gut net neutrality protections - is “fundamentally flawed.” They urged the Commission to continue to regulate broadband Internet service under Title II of the Communications Act.

“An Internet which guarantees fair and equal treatment is a core driver of America’s economic growth. We believe network neutrality principles are critical to that process,” the investors said. “Open Internet principles also promote free speech, civic participation, democratic engagement and marketplace competition, as well as robust broadband adoption and participation in the Internet community by people of color and other socially and economically disadvantaged groups.”

The investor filing specifically challenged the FCC staff’s assertion that Open Internet rules adopted in 2015 have caused Internet Service Providers (ISPs) to reduce their investment in broadband networks.

“As investors, we find no evidence that the Commission’s 2015 Open Internet order has caused publicly-held ISPs to reduce their investment in broadband networks,” the investors said. “Such a conclusion is at odds with multiple public statements by corporate executives of the leading ISPs as well as data the companies have previously supplied to shareholders in their filings to the Securities and Exchange Commission.”

The investor filing cited research by Open MIC, a non-profit that promotes shareholder engagement with media and telecommunications companies, which examined recent financial statements from ISPs holding an estimated total of 86% of the U.S. broadband Internet market. Those firms include Verizon, AT&T, Comcast, Charter, CenturyLink and Altice.

“Overwhelmingly and without exception, the leading providers of broadband internet service in the U.S. portray an outlook for network investment that is healthy and robust,” the investors noted. The investors argued that changes to Title II regulation could also stifle growth in initial public stock offerings by tech companies. Potential “blocking, throttling and paid prioritization of Internet content constitute a significant threat to economic innovation on the Internet,” they added.

Scott M. Stringer, New York City Comptroller, one of the signers of the Comment, said: “In the 21st century, the Internet is a modern form of the public square. It’s where ideas are exchanged, movements are started, value is created, and information is shared across the globe. By rolling back these commonsense consumer protections, the FCC would be limiting free speech, stifling value-creating innovation, and undermining fairness for all of us. The bottom line is simple: information shouldn’t be sold to the highest bidder. That’s not just bad for investors – it’s bad for Americans.”

Jonas Kron, Senior Vice President of Trillium Asset Management, added: “The FCC needs to understand that the vast majority of investors these days have portfolios that are tied to broad stock market indices or are widely diversified throughout the market. That means asset managers want to see the business benefits of the Internet rippling and multiplying throughout the entire economy - not being hoarded only by a handful of incumbent gatekeeper companies that deliver broadband Internet services.”

Investors have long been a critical voice in the net neutrality fight. In the years leading up to the adoption of net neutrality rules in 2015, investors put significant pressure on ISPs as well as the FCC in support of the reclassification of the Internet under Title II of the Communications Act.

“Investors understand the business case for net neutrality, and now they are again ensuring that the FCC hears it loud and clear,” said Michael Connor, Executive Director of Open MIC. “The investment community worked hard to make sure Open Internet rules were successfully adopted in 2015, and they’re not going to back down now. Consistent regulatory policy is critical for a thriving Internet economy.”

Investment advisors and investment management firms joining the FCC comment are Scott M. Stringer, New York City Comptroller; Boston Common Asset Management, Trillium Asset Management LLC, Sustainability Group of Loring, Wolcott & Coolidge, Zevin Asset Management LLC, Friends Fiduciary Corporation, Arjuna Capital LLC, Share Power Responsible Investing Inc., SRI Investing LLC and Earth Equity Advisors LLC. Foundations joining the comment are the Nathan Cummings Foundation, Park Foundation, Wallace Global Fund, The Russell Family Foundation, Bullitt Foundation, Robert W. Deutsch Foundation, The Prentice Foundation, The Christopher Reynolds Foundation, Singing Field Foundation, As You Sow Foundation.

For more information:
Michael Connor
Executive Director, Open MIC