| BOSTON/NEW YORK
BOSTON/NEW YORK Nov 20 Shareholders of telecom
giants AT&T Inc and Verizon Communications Inc are
seeking more details related to their sharing of customer
information with governments, showing investors starting to push
back over the role of communications companies in spying
Activists including Trillium Asset Management of Boston and
the $161 billion New York State Common Retirement Fund have
filed proposals for the spring shareholder meetings of AT&T and
Verizon, representatives said.
Both resolutions call on the companies to report
semi-annually on "metrics and discussion regarding requests for
customer information by U.S. and foreign governments."
As carriers of massive amounts of voice and data traffic,
the telecommunications companies have been at the center of
controversies over the use of their data by U.S. intelligence
agencies. Just on Monday the U.S. Supreme Court declined to hear
a challenge to a ruling that gave the government access to
Verizon records of millions of telephone calls. [ ID: nL2N0J315X
A worry is the close ties could hurt the companies'
business, said Trillium Senior Vice President Jonas Kron.
"From an investor perspective, this is one of those issues
where there's an overlap of interests" among privacy advocates
and business groups, Kron said. He cited surveys that spying
fears could cut tens of billions of dollars from the sales of
cloud computing services.
AT&T spokesman Mark Siegel said that "As standard practice
we look carefully at all shareholder proposals but at this point
in the process we do not expect to comment on them."
Verizon spokesman Bob Varettoni declined to comment on the
shareholder proposal it received except to say the company is
Customers in growth markets like China have historically
mistrusted U.S. technology corporations. Those fears have been
stoked by disclosures from former National Security Agency
contractor Edward Snowden.
For instance, Cisco Systems Inc last week blamed
what some analysts call "the Snowden effect" in part for dismal
quarterly revenue. Others have questioned the financial impact
of the revelations, however. [ ID: nL2N0HA03X ]
In response many technology companies have pushed for -- or
at least aimed to be seen pushing for -- transparency in their
dealings with U.S. intelligence agencies.
Companies including Google Inc, Microsoft
Corp, Twitter Inc, Facebook Inc, Apple
Inc and Yahoo! Inc have published
"transparency reports" showing government data requests. Some
have in addition gone to court seeking to disclose more details.
But the two big telecommunications companies have not
responded as aggressively to the data requests, the shareholder
activists note in their resolutions.
Specifically, the resolutions cite press reports of the
intelligence agencies' involvement with the companies, and the
resulting criticism from figures like Brazil's president Dilma
Rousseff, who called U.S. monitoring activities "a breach of
The resolutions call on AT&T and Verizon to publish
semi-annual reports, subject to current laws, "providing metrics
and discussion regarding requests for customer information by
U.S. and foreign governments, at reasonable cost and omitting
Trillium has $1.3 billion under management and calls itself
the oldest independent investment adviser focused on sustainable
and responsible investing. Trillium and other activists have
used shareholder proposals in the past to air out arcane issues
such as several "network neutrality" measures it brought at AT&T
and Verizon since 2012. One at Verizon in the spring won support
from 24 percent of shareholders.
Even when such measures don't pass, activists see them as a
way to call attention to issues.
"Often the utility of such resolutions is to generate
conversation with and among management, particularly if the
company has refused to engage in other ways," said Christine
Bader, a lecturer on human rights and business at Columbia
University. She is also affiliated with the Global Network
Initiative, a privacy-advocacy group that counts some of the
technology companies as participants.
Filers of the AT&T proposal include the New York State fund,
Trillium, the American Civil Liberties Union of Northern
California, and Arjuna Capital, according to a statement from
Open MIC, a non-profit organization in New York that works with
investors on media issues and helped organize the resolutions.
Filers of the Verizon proposal include Trillium, the ACLU
chapter, the Park Foundation, and Clean Yield Asset Management,
the activists said.