April 21,
2009
Vote
FOR Item 5 to Report on Network Management Practices
Public
Expectations of Privacy and Freedom of Expression on the Internet
Dear
CenturyTel, Inc. Shareholder:
We are
writing to urge you to VOTE
“FOR” ITEM 5 on the Company proxy
materials - “Report on Network Management Practices Public Expectations of
Privacy and Freedom of Expression on the Internet” - a shareholder proposal
asking the Company’s board to prepare a report which examines the effects of the
Company’s Internet network management practices on the public’s expectations of
privacy and freedom of expression on the Internet. We believe this is an
especially timely issue which we contend has embroiled our Company and others in
national controversy during the past year and is likely to continue as a source
of concern into the future.
This
proposal has its origins in a trend that is obvious to most Americans: the
Internet is becoming the defining infrastructure of America’s economy and
society in the 21st century. Companies like ours, which operate as Internet
Service Providers (ISPs), are gatekeepers to this infrastructure: providing
access, managing traffic, insuring communication, and forging rules that shape,
enable and limit the public’s Internet use.
With more
than 70% of Americans now using the Internet on a daily basis, a fundamental
concern is the effect network management practices have on public expectations
of privacy and freedom of expression on the Internet.
A recent
survey by the Consumer Reports National Research Center, for example, found that
72% of Americans are concerned that their online behaviors are being tracked and
profiled by companies; 53% of Americans are uncomfortable with companies using
their email content or browsing history to send relevant ads; and 54% of
Americans are uncomfortable with third parties collecting information about
their online behavior.
Network
management practices have come under public scrutiny by consumer and civil
liberties groups and regulatory authorities, including committees of the U.S.
Congress, the Federal Communications Commission and the Federal Trade
Commission. We believe Internet network management is a significant public
policy issue and that failure to fully and publicly address this issue poses
potential competitive, legal and reputational harm to the Company.
Paul Ohm,
Associate Professor of Law at the University of Colorado Law School and formerly
an attorney at the U.S. Department specializing in computer crime, has recently
written:
“Nothing
in society poses as grave a threat to privacy as the Internet Service Provider
(ISP). ISPs carry their users' conversations, secrets, relationships, acts, and
omissions. Until the very recent past, they had left most of these alone because
they had lacked the tools to spy invasively, but with recent advances in
eavesdropping technology, they can now spy on people in unprecedented ways.
Meanwhile, advertisers and copyright owners have been tempting them to put their
users' secrets up for sale, and judging from a recent flurry of reports, ISPs
are giving in to the temptation and experimenting with new forms of spying. This
is only the leading edge of a coming storm of unprecedented and invasive ISP
surveillance.”
In 2008,
our Company reportedly became one of the subjects of national controversy and a
target of a Congressional inquiry for having entered into a partnership with an
online advertising company, NebuAd, which allowed for targeted advertising to
customers based on which Web sites the customers liked to visit. According to
reports attributed to Congressional staff members, customers were required to
“opt-out” of a program in which many were not aware they were
enrolled.
Rep. Mike
Doyle (D -PA) said the NebuAd practice of Internet monitoring without subscriber
permission "goes against everything the country's been founded on." Rep. Ed
Markey (D- MA), chairman of the House subcommittee on Telecommunications and the
Internet, suggested the business model was, without opt-in, flatly illegal. "We
need to have remedial legal courses for some corporate general counsels," Markey
said. Other experts suggested that the practices embraced violated Internet
Engineering Task Force (IETF) standards that created today’s Internet. Following
the Congressional inquiry, the Nebuad program was halted. In our opinion,
however, considerable damage may have been done to the reputation of our
Company.
As a
result of the NebuAd practices, our Company has also been named, along with
others, as a defendant in a class action lawsuit filed with the U.S. District
Court in Northern California.
Internet
network management practices are understandably technical and complicated, which
is why even well-intentioned initiatives may sometimes deprive some citizens of
their rights. We do not seek to interfere with our Company’s day-to-day
management, and we applaud management’s goal of maximizing shareholder
value.
However,
as the growth of digital media accelerates – with new electronic devices, the
growing popularity of Internet video and gaming, and the subsequent increased
demand for Internet bandwidth – we believe consumer privacy and freedom of
expression will increasingly be front-page issues, commanding shareholder
attention.
In our
opinion, as long as Internet network management practices are developed in
secret, Americans can expect that their worst fears may be realized, with
persistent challenges to their freedom of expression and privacy. We believe
ISPs such as our Company are managing and discussing Internet networks in a
manner that provides the public with little or no meaningful understanding of
how their privacy and freedom of speech interests are protected. The potential
risks that may be associated with this approach would be untenable. It is time,
we believe, for companies to stop hiding behind the legal jargon in their
privacy policies and “terms of use” and, instead, address these issues
directly.
We ask
the Company to provide greater transparency and accountability for its network
management practices because doing so is in the corporations’ and their
shareholders’ best interests. We believe failure to provide greater transparency
can lead to high-profile scrutiny and action by Congress and regulatory agencies
as well as potential litigation by consumer or civil rights groups. Weakened
consumer confidence in the companies and their Internet services can damage
brand reputation, thereby potentially harming share value.
Finally,
we recommend going to http://www.openmic.org/node/207 to read a detailed
discussion of the issues. The memorandum available on this site explains at
length how we believe that privacy and freedom of expression issues as they
apply to ISPs warrant shareholder attention.
We
therefore strongly urge you to VOTE FOR
ITEM 5 requesting that the Company board prepare a report regarding the
impact of Internet network management practices on public expectations of
freedom of expression and privacy.
Please
contact Jonas Kron at 971-222-3366 for additional information.
Sincerely,
Jonas
Kron, Senior Social Research Analyst
Trillium
Asset Management Corporation
Please Note: The cost of this
communication is being borne entirely by Trillium Asset Management Corporation.
This is not a proxy solicitation and Trillium Asset Management Corporation is
not asking for your proxy
card. Please do not send us your proxy card but return it to CenturyTel, Inc
before the May 7, 2009 annual meeting.