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April 09, 2012
Trillium Urges Verizon Shareowners to Support Net Neutrality
    by Robert Kropp

A letter sent to shareowners by the investment management firm outlines the economic and social case for continued net neutrality at the wireless telecommunications company

A fundamental principle since the earliest days of the Internet has been network neutrality, according to which service providers (ISPs) are obliged to treat all sites without discrimination. An important feature of the principle has been that network owners may not devise tiered systems of internet access, in which those that pay for it enjoy superior access to those who do not.

This year, Trillium Asset Management submitted shareowner resolutions at AT&T and Verizon, requesting that each company "publicly commit to operate its wireless broadband network consistent with network neutrality principles." Historically, the Securities and Exchange Commission (SEC) has allowed companies to omit resolutions addressing net neutrality on the grounds of ordinary business; this year, for the first time, the SEC did not.

In a let ter to Verizon, the SEC stated, "In view of 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, we do not believe that Verizon may omit the proposal from its proxy materials."

As the text of Trillium's resolution points out, "an open Internet accounts for billions of dollars of value for the economy."

"We believe this economic and social value is an important factor in the growth of our economy and widely diversified investment portfolios," the resolution continues.

In addition to the financial benefits of net neutrality, an important social aspect comes into play when wireless telecommunications networks like those of AT&T and Verizon are considered. "Open Internet policies on wireless networks (the fastest growing segment of the Internet) have particular importance for minority and economically disadvantaged communities," the resolution states. "People of color access the Internet via cell phones at a much greater rate than their white counterparts."

In a lette r sent to Verizon shareowners, Trillium urged them to support its resolution.

"It is incumbent on a wireless Internet Service Provider (ISP) like Verizon to provide an overwhelming case for turning its back on network neutrality, particularly in this fast-growing segment of its business," the letter states. "Not only does the issue potentially raise litigation, reputation and investment risks for the Company, but tampering with this engine of economic growth by violating network neutrality principles and creating 'fast lanes' in the Internet could create potentially costly risks for the US economy, the global economy, under-represented communities and the public at large."

Trillium's proposal, the letter continues, "seeks to avoid those potential risks and protect the balance of economic incentives that makes the Internet work so well as a central component of our economic, social, artistic and political lives."

Verizon's annual general meeting will be held on May 3rd.


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