Investing in Digital Equity for Business Growth

The ROI of Digital Inclusion Business Reasons to Invest in Digital Inclusion Partnerships May 17, 2017 Open MIC

Shareholder Proposals: A Tool for Corporate Accountability Available tool for investors with $2,000 worth of stock or more Focuses on legal, financial, reputational risks Forces companies to respond to an issue: Ask for no action from the S.E.C. Respond to request shareholder proposal is withdrawn Do nothing goes to a shareholder vote Provides an avenue for shareholders to vote on whether the company should take action on various issues

Snapshot: The Business Case for Digital Equity Broadband availability increases GDP and grows the economy Every 2% increase in broadband infrastructure availability can be expected to return approximately $5.7 billion annually. (ASR Analytics) Gigabit broadband communities exhibit a per capita GDP approximately 1.1 percent higher than the similar communities with little to no availability of gigabit services. (Analysis Group) The Internet economy accounts for 5% of the country s GDP, and up to 15% of recent economic growth Broadband availability translates to job growth In one Tennessee study, availability of broadband yielded between $865 million and $1.3 trillion net economic and social benefits, and between 2,800 and 5,200 new jobs. (Bento J. Lobo) Increased broadband availability means increased broadband affordability Expanded broadband infrastructure including increased data rates has tended to reduce subscription prices ...from $293 per Mbps per month before expansion to $14 per Mbps per month afterward. (Internet Telecommunication Union)

Overview: Barriers to Equitable Access Cost Lack of competition among ISPs Participation in programs like Lifeline Broadband and Lifeline Phone are voluntary Lack of digital literacy Systemic racism 2016 Free Press research finds that communities of color are on the wrong side of the digital divide in ways that income differences alone do not explain. After accounting for differences in income, education, age and other factors impacting the decision to subscribe, we observe a home-internet adoption gap of 6 to 8 percent between Hispanic, Black and Native American households and White households.

Investors Challenge AT&T on Digital Equity October 2016: Open MIC worked with Zevin Asset Management in submitting a letter to AT&T executives Could investors expect AT&T to Commit to providing broadband access under the terms of FCC s Lifeline Broadband? Publish reports regarding the progress of its service offerings for low-income subscribers? Adopt time-bound goals to enroll low-income broadband customers? Initiate large-scale communication and outreach efforts about affordable service? Partner with nonprofits to encourage low-income customers to subscribe?

Investors Challenge AT&T on Digital Equity November 2016: Open MIC worked with Zevin Asset Management and Arjuna Capital to submit a shareholder proposal to AT&T ...to what degree the Company has time-bound goals to enroll low-income broadband customers; participation in government subsidy programs aimed at potential customers; how many people currently participate in Access from AT&T and other low-income programs; and how AT&T is reaching out to low-income communities where access is limited,

Building Public Tension November 2016: Public Interest Groups Slam AT&T s Refusal to Serve Low-Income Americans Through Lifeline Program December 2016: Digital Denied: Free Press Report Exposes the Impact of Systemic Racism on Internet Adoption January 2017: AT&T blocks shareholder vote on the proposal March 2017: NDIA + Connect Our Community report suggests AT&T has systematically discriminated against lower-income Cleveland neighborhoods in deployment of home Internet April 2017: Lawsuit threatened against AT&T over slow Internet speeds in low-income Cleveland neighborhoods Haas Institute finds AT&T is targeting deployment of its all-fiber internet service in California to higher-income neighborhoods, with the median income of the communities in all of AT&T's service areas 34 percent lower than the median income of the neighborhoods where fiber has been deployed

Looking Ahead: Stronger Action Against Companies Open MIC is working on education and awareness among investors to pressure ISPs and other major companies This is not about increasing revenue for individual companies ; this is about a rising tide that lifts all boats More confrontational action can include: Shareholder proposals Direct actions at shareholder meeting Open letters Letters-to-the-editor Petitions from ISP workers Pressure from the small business community Continued pressure from civil rights and advocacy groups