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Investors Force AT&T, Verizon Neutrality Votes
One Firm Argues Neutrality Support is Good for Business
by Karl Bode 12:40PM Monday Apr 09 2012
Back in February we noted that the SEC announced that wireless carriers had to include a resolution supporting wireless net-neutrality in annual shareholder votes. This was something driven by several shareholders -- most notably AT&T investor Mike D of the Beastie Boys. As shareholders of AT&T, Sprint and Verizon are now poised to vote for carriers to uphold neutrality for the very first time -- groups are rallying to explain why supporting a neutral Internet is important from the investor perspective.


Investment firm Trillium Asset Management is circulating a statement arguing that they should vote yes on these rules for the good of investors and consumers alike.

Trillium's letter cites studies from the McKinsey, New York University, University of Florida and University of Notre Dame that suggest "enormous financial benefits" created by ensuring that networks remain open and neutral. The letter also expresses concern that AT&T, Verizon and Sprint will "tamper with this engine of economic growth" by creating "fast lanes" on their wireless networks for those willing and able to pay a premium.

The problem of course is that most investors will vote against these measures, as they want the company they're investing in doing things that improve quarterly returns, such as giving their own content priority or imposing punitive new pricing systems. Most investors lust rather mindlessly after short-term gains, and can't or won't see the benefits of trying to keep the Internet as a whole open and competitive. Many investors don't even want to re-invest in the network, even if the company they're investing in is in the broadband business and neglecting infrastructure upgrades means a lower quality company.

Neutrality infractions may not be good for innovation and many businesses, but they're great for a carrier's bottom line.

At the same time, AT&T's often greedy and hare-brained monetization schemes (like trying to erect new troll tolls for app makers) only work to destroy a company's brand while executives wage war against the natural evolution of technology, both things that will do these companies harm long term. Granted many investors don't care about a company's long-term health, as they'll flee long before the piper has to be paid.

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25139889

join:2011-10-25
Toledo, OH

Voting Yes

doesn't really mean anything. Still gives them the right NOT to follow them even if they're listed in the SEC fillings.

FFH
Premium
join:2002-03-03
Tavistock NJ
kudos:5

Proxy mechanism dooms these votes for net neutrality

If AT&T or Verizon want to OK pro-neutrality votes, they will pass. And if they don't want them to pass they won't. The proxy mechanism for major corporations almost always give the power to the Board of Directors who vote the proxies of most investors who give them that authority. It would take every institutional investor to be against the Board's choice to even have a glimmer of hope of defeating a Board of Director's decision.

Mutual Funds(AT&T's & Verizon's biggest investors) send proxy statements to the Fund's members. Over the last 30 yrs I recall only once I filled out the proxy statement to withhold from the Board the right to vote my proxy as they saw fit.

So basically the Board's of AT&T & Verizon will vote the way they want. The FCC forcing putting it up to a vote is pretty meaningless.
openbox9
Premium
join:2004-01-26
Germany
kudos:2

Re: Proxy mechanism dooms these votes for net neutrality

said by FFH:

It would take every institutional investor to be against the Board's choice to even have a glimmer of hope of defeating a Board of Director's decision.

Or vote different members to the board that will proxy their desires.
said by FFH:

Mutual Funds(AT&T's & Verizon's biggest investors) send proxy statements to the Fund's members. Over the last 30 yrs I recall only once I filled out the proxy statement to withhold from the Board the right to vote my proxy as they saw fit.

The funny/sad thing is that I'm willing to bet a majority of retail investors never even read those notices.
25139889

join:2011-10-25
Toledo, OH
Yep! and NN will always be meaningless until Congress actually drafts the rules and make them law.

Oh_No
Trogglus normalus

join:2011-05-21
Chicago, IL

Those that vote no

Those that vote "no" are just hurting their own company.
Not following net neutrality just helps competition.
There might not be much now, but it encourages people to create competition.
Also i am sure those investors use the internet, so if they are against net neutrality they will hurt themselves in the end and every other customer.

If they vote "yes" to have a neutral network and even get rid of caps on top of that then people wont have any reason to jump to a competitor if there ever is one.

ATT has the best value for internet.
6 mpbs for $25 a month
If it were not for caps that put in place 1 year ago they would win every time against more expensive cable plans.
axus

join:2001-06-18
Washington, DC

Great, no problem with a company regulating itself

I imagine investors in AT&T have other holdings too. If they have some financial interest in Facebook and Netflix, they see that net neutrality would earn them more money there than would be left on the table for AT&T.