AT&T Takes a Small Step Toward Net Neutrality

AT&T (NYSE: T) announced last week that it will be allowing more of its customers to use Apple’s video chat service FaceTime over its cellular network. Despite the revised policy, however, many of AT&T’s customers will still be left out.

While, as investors, we are pleased that AT&T has taken this step, we remain concerned that the company has not rolled out the service to all of its customers. AT&T is not transparent and has not evidenced practices to guide implementation of its stated positions on an open Internet.

Late last year, Trillium and OpenMIC filed a shareholder proposal calling on the company “to publicly commit to operate its wireless broadband network consistent with network neutrality principles” that would maintain open access to the Internet on wireless networks. The proposal, which was voted on for the first time this year, attracted enough support from voting shareholders (more than $11 billion in shares) to be included on next year’s ballot.

AT&T’s decision follows a letter to the Federal Communications Commission from OpenMic, Trillium and other investors asking the agency to investigate AT&T’s original decision to limit FaceTime to only some of its customers. We believe that AT&T’s approach could violate the Commission’s Open Internet Rules which require that mobile providers shall not “block applications that compete with the provider’s voice or video telephony services.”

Following the company’s recent announcement, three key public interest groups, Free Press, Public Knowledge, and New America Foundation’s Open Technology Institute, announced their intention to “file their complaint if AT&T fails to make FaceTime available to all of its customers in a timely manner.”

In light of potential reputational, regulatory, and legislative risk related to AT&T’s network management practices and the issue of network neutrality, this lack of disclosure is troubling. We firmly believe that all concerned parties, including investors, regulators and public interest groups, need to maintain a vigilant eye on AT&T’s behavior.