Open MIC Investor Coalition Files Shareholder Resolutions
Investor
Coalition Seeks Reports from Internet Service Providers
Regarding
Impact of Network Practices on Freedom of Expression and
Privacy
The resolutions have been submitted to leading Internet
service providers (ISPs) in the U.S., including AT&T (NYSE:T); Charter
Communications (NASDAQ:CHTR); CenturyTel, Inc. (NYSE: CTL); Comcast Corporation
(NASDAQ:CMCSA); EarthLink Inc. (NASDAQ:ELNK); Embarq Corporation (NYSE:EQ);
Knology Inc. (NASDAQ:KNOL); Sprint Nextel Corporation (NYSE:S); Qwest
Communications International (NYSE:Q); and Verizon Communications (NYSE:VZ). Resolutions may be filed with additional
ISPs.
The investor coalition includes the New York City Pension
Funds and leading socially responsible investment firms Trillium Asset
Management Corp., Boston Common Asset Management, Calvert Asset Management
Company, Domini Social Investments, Harrington Investments, and the As You Sow
Foundation. The coalition will seek
support from additional shareholders in voting for the resolutions. The New York City Pension Funds collectively
hold more than 10.5 million shares in the six ISPs where they are the lead
filer.
The coalition has been organized by the Open Media and
Information Companies Initiative - Open MIC
- a non-profit media policy group that works to foster a diverse media
environment through market based solutions.
The resolutions highlight the vital role played by ISPs
in providing Internet access to more than 211 million Americans - or 70% of the
U.S. population - who use the Internet daily.
They point out that ISPs are managing traffic, insuring communication,
and forging rules that shape, enable and limit the public's Internet use.
Noting that ISP
network management practices have come under public scrutiny by consumer and
civil liberties groups, regulatory authorities and shareholders, the
resolutions assert that "Internet network management is a significant public
policy issue; failure to fully and publicly address this issue poses potential
competitive, legal and reputational harm" to each of the companies.
The resolutions, which are intended for consideration at
the companies' 2009 annual shareholder meetings, call on the board of each ISP to issue a report examining the effects of the
company's Internet network management practices on the public's expectations of
privacy and freedom of expression on the Internet.
"With greater numbers of people using the Internet for
everything from shopping to healthcare, Internet network management and its
effect on the user have become significant public policy concerns," said New
York City Comptroller William C. Thompson Jr., in announcing resolutions filed
on behalf of the New York City Pension Funds. "These ISPs are among the biggest
in the world and if the network management practices are having an effect on
how the public perceives the companies, we as shareholders have a right to know
what that effect may be."
Farnum Brown of Trillium Asset Management, which has
filed resolutions with several of the ISPs, said: "These companies have
responded to the challenges of managing the Internet in a patchwork, ad hoc
fashion. In so doing they've failed to notice the profound social policy
issues they've unwittingly engaged. Americans
are concerned about how their use of the Internet is monitored. They're
concerned about whether their privacy and freedom of expression are respected
by the companies that manage the Internet. We as shareholders believe it
is in these companies' best business interests to respond to those
concerns."
Michael Connor, Executive Director of Open MIC,
noted recent Congressional scrutiny of ISPs' use of so-called "deep packet
inspection" technology, which can provide individual personal data based on a user's
Internet traffic. In another case, the
Federal Communications Commission voted in August to punish Comcast Corp. for
its surreptitious interference with subscribers' use of peer-to-peer software
applications.
At the time, FCC Chairman Kevin Martin said Comcast's
network management amounted to "looking inside its subscribers' communications,
blocking that communication when it uses a particular application regardless of
whether there is congestion on the network, hiding what it is doing by making
consumers think the problem is their own, and lying about it to the public..."
"There are multiple examples that raise concerns
regarding Internet management practices," said Connor. "As the growth of digital media accelerates -
with new electronic devices, new forms of delivery, and increased demand for
Internet bandwidth - privacy and freedom of expression will increasingly be
front-page issues, commanding shareholder attention."
About Open MIC
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