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February 12, 2009
Who Controls the Internet?
    by Robert Kropp

Shareowner proposals challenge Internet Service Providers for greater transparency in decisions on freedom of expression and privacy.


Back in 1996, at a time when only the most prophetic could have anticipated the degree to which the Internet would become central to the fabric of contemporary life, John Perry Barlow of the Electronic Frontier Foundation (EFF) issued a much-circulated Declaration of the Independence of Cyberspace.

Barlow's idealistic and confrontational broadside stated, "In China, Germany, France, Russia, Singapore, Italy and the United States, you are trying to ward off the virus of liberty by erecting guard posts at the frontiers of Cyberspace. Your increasingly obsolete information industries would perpetuate themselves by proposing laws, in America and elsewhere. The global conveyance of thought no longer requires your factories to accomplish."

In the years since, efforts by governments and corporations to stem the flow of free expression via the Internet have grown, and the right to privacy of a considerable number of the world's population (in the US alone, it is estimated that 211 million people use the Internet on a daily basis) has been eroded.

In China, for instance, where it is estimated that more users access the Internet than in the US, "the government continues to refine its technical filtering system while deputizing a range of actors to limit the ability of its citizens to access and post content the state considers sensitive," according to the OpenNet Initiative (ONI). ONI has also found that "the number of states that limit access to Internet content has risen rapidly in recent years."

Because of charges in 2005 of collusion by Google, Microsoft and Yahoo with the Chinese government in the suppression of domestic dissent, a coalition of leading information and communications companies, major human rights organizations, academics, investors and technology leaders launched the Global Network Initiative (GNI). GNI was formed to resist efforts by governments that seek to enlist companies in acts of censorship and surveillance that violate international standards.

In the US, challenges to freedom of expression and privacy are rarely enacted in the name of suppression of dissent. Instead, such challenges are often initiated by the Internet Service Providers (ISPs) themselves, in the name of ordinary business practice. As a result of practices by ISPs that potentially would erode such freedoms on the Internet, a coalition of investors led by the Open Media and Information Companies Initiative (Open MIC) has filed shareholder resolutions with 10 US-based ISPs, requesting that their boards report on the impact of network management practices.

The resolution, which asserts that "Internet network management is a significant public policy issue," calls on the boards of the ISPs to report on the effects of Internet network management practices on the public's expectations of privacy and freedom of expression on the Internet.

"The resolution is the first to address the impact of companies managing these public networks on freedom of expression and privacy in the US," observed Michael Connor, Executive Director of Open MIC.

Farnum Brown, senior portfolio manager and research analyst at Trillium Asset Management, an independent investment management exclusively devoted to socially responsible investing, said, "As socially responsible investors we found it natural to raise these issues. We understand that ISPs have a legitimate concern in network management issues. Let's make sure that an ad hoc approach does not lead to exclusion of open communication."

"We as shareholders are concerned about companies stumbling through a minefield of sensitive issues without developing a strategic overview of what they are doing," Brown continued.

The ISPs targeted thus far include including AT&T, Charter Communications, CenturyTel, Comcast, EarthLink, Embarq, Knology, Sprint Nextel, Qwest Communications International, and Verizon Communications.

The investor coalition includes the New York City Pension Funds and leading socially responsible investment firms Trillium, Boston Common Asset Management, Calvert Asset Management, Domini Social Investments, Harrington Investments and the As You Sow Foundation.

"The digital infrastructure is increasingly the defining infrastructure for the 21st century," said Brown. "Publicly-held firms that were highly regulated telecommunications companies and cable companies were transformed into companies with much more discretion over what passes through their networks."

The resulting ad hoc approach to network management issues led to a number of highly publicized missteps by ISPs in 2008 which in turn contributed to the necessity of the shareowner resolution addressing network management practices.

In August, AT&T censored its webcast of a performance by Pearl Jam by blocking the audio feed of singer Eddie Vedder ad-libbing two lines of lyrics critical of George W. Bush. The lyrics contained no obscenities, and in the face of a viral online campaign critical of its decision AT&T announced a new policy that failed to address First Amendment implications in most of its online business activities.

In September, Verizon Wireless denied a request by the National Abortion Rights Action League (NARAL) to transmit via the company's network text messages to people who had signed up to receive them. After Verizon's action was publicized, the company reversed itself and permitted the transmission of the messages. While Verizon continues to assert its right to determine if the transmission of text messages through its network will be permitted, it has not announced a policy outlining the grounds for such decisions.

In October, Comcast admitted that it delayed some Internet traffic on its network after tests revealed that the company had actively interfered with the sharing of files on peer-to-peer networks. The FCC subsequently found that Comcast's broadband network management practices violated the agency's policy principles, and ordered Comcast to disclose how its management practices affect its customers. Comcast has yet to publicize its network management policies.

Referring to the AT&T incident, Brown said, "Trillium has been in dialogue with AT&T for a year. I have said to a couple of its executives that this is an opportunity for AT&T to take the lead in confronting these issues, to turn lemons into lemonade around the Pearl Jam incident. They haven't seen the wisdom of that suggestion yet."

In fact, Connor of Open MIC added, "The SEC granted a no-action letter to AT&T on the grounds that the privacy elements of our proposal pertain to ordinary business practices. And while several ISPs have questioned our proposal, none have reached out to the coalition to engage on the issue."

"We're not saying there should not be rules but if there are rules that they should be transparent," Connor continued. "If you don't lay the groundwork for these arguments now a crisis can occur very quickly, in which rules do not exist to protect privacy and freedom of expression."

Brown added, "Socially responsible investors should realize that the issue of open digital communications is an overarching issue that impacts upon all the ESG issues that we have worked on for so long. To the extent that people are concerned about environmental and human rights issues, the success of advocacy will be determined by the health of the information ecosystem."

 

 
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