Outcome: Successfully withdrawn. The company has agreed to incorporate privacy and freedom of expression responsibilities into its governing documents.
The Internet is becoming the defining infrastructure of our economy and society in the 21st century. Internet Service Providers (ISPs) like our company forge rules that shape, enable and limit Internet use.
As such, ISPs have a weighty responsibility in devising network management practices. ISPs must give far-ranging thought to how these practices serve to promote–or inhibit– public participation in the economy and in civil society.
Of fundamental concern is the effect ISPs’ network management practices have on public expectations of privacy and freedom of expression on the Internet.
The Internet serves as an engine of opportunity for social, cultural and civic participation in society;
Network neutrality rules are needed to “facilitate the growth of the Internet and give private companies the correct incentives to continue investing in this significantly valuable good,” according to a January 2010 report by the Institute for Policy Integrity at New York University. The report finds that an open Internet accounts for billions of dollars of economic value for Americans.
The Internet plays a critical role in addressing societal challenges such as provision of health care, with over 8 million Americans looking for health information online daily;
There is abundant evidence that Americans are alarmed about Internet privacy. A study of online advertising by researchers at the University of Pennsylvania and the University of California, Berkeley, found that “most adult Americans (66%) do not want marketers to tailor advertisements to their interests. Moreover, when Americans are informed of three common ways that marketers gather data about people in order to tailor ads, even higher percentages — between 73% and 86% — say they would not want such advertising;”
Internet network management is a significant public policy issue; failure to fully and publicly address this issue poses potential competitive, legal and reputational harm to our Company;
Any perceived compromise by ISPs of public expectations of privacy and freedom of expression on the Internet could have a chilling effect on the use of the Internet and detrimental effects on society;
In 2008, CenturyLink’s practices became the subject of national controversy and the target of a major Congressional investigation. The company had entered into partnerships with an online advertising company, NebuAd, which allowed for targeted advertising to customers based on which web sites the customers liked to visit. Importantly, customers were required to “opt-out” of a program in which many were not aware they were enrolled;
In 2009 and 2010, this proposal attracted an average of 29% of the vote – a clear indication of significant shareholder concern. Since then CenturyLink has not taken any steps to address these issues.
Shareholders request the board issue a report by October 2011, at reasonable expense and excluding confidential information, examining the effects of the company’s Internet network management practices in the context of the significant public policy concerns regarding the public’s expectations of privacy and freedom of expression on the Internet.