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June 04, 2012
Zevin Asset Management Calls for Net Neutrality at Wireless Firms
    by Robert Kropp

The Boston-based investment firm writes to AT&T and Verizon, asking them to ensure that net neutrality is maintained and that the wireless providers refrain from imposing discriminatory fee structures.

Zevin Asset Management may be a relatively small investment management firm, with $335 million in assets under management, but since Sonia Kowal came aboard as Director of Socially Responsible Investing in 2009, it has become a leader in corporate engagement.

In 2012 alone, Zevin has co-filed 14 shareowner resolutions, addressing issues ranging from the separation of the positions of Chair and CEO to hydraulic fracturing and oil sands development.

Last week, Kowal wrote to AT&T and Verizon, requesting that the nation's two largest wireless providers commit to the principal of network neutrality. Net neutrality obliges Internet service providers 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.

In her letter to AT&T, Kowal wrote, "We are writing to urge you to commit to managing your company's wireless network consistent with net neutrality principles."

"Without this assurance," the letter continued. "AT&T could create 'fast lanes' to wireless broadband subscribers by charging a premium to select content and service providers."

"We are concerned that not doing so could raise litigation, reputation, and investment risks for AT&T," Kowal wrote, adding that Zevin voted in favor of a shareowner resolution addressing the issue at the company's annual general meeting. Resolutions at both wireless providers, submitted by Trillium Asset Management, gained enough support to reappear on next year's proxy statements.

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.

"As diversified investors, we are concerned that such a discriminatory fee structure would upend the economic incentive structure of the Internet, which research has shown has created enormous financial benefits for the US and global economies," Kowal wrote. "It would act as a powerful disincentive for investment in Internet content creation and provide little incentive for investment in Internet infrastructure."

Also, Kowal observed, the failure to apply net neutrality rules would affect underprivileged communities to a disproportionate degree, as reliance on wireless networks for Internet access is far more widespread.

"We would welcome a statement from AT&T that confirms that it will publicly commit to operate its wireless broadband network consistent with network neutrality principles," the letter concluded. "i.e. operate neutral networks with neutral routing along the company's wireless infrastructure such that the company does not privilege, degrade or prioritize any packet transmitted over its wireless infrastructure based on its source, ownership or destination."


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