December 06, 2013, 8:40 PM — AT&T wants to silence a shareholder proposal that it disclose the government requests it receives for customer information, rejecting a step that Google, Microsoft and other Internet companies have already taken.
The proposal calls on AT&T to publish semi-annual reports about the information requests it receives from U.S. and foreign governments. Under the plan, the reports would be subject to existing laws and omit proprietary information. The language was submitted by the New York State Common Retirement Fund and other AT&T shareholders after recent revelations about telecommunications and Internet snooping by the National Security Agency (NSA) and other U.S. agencies.
On Thursday, AT&T asked the U.S. Securities and Exchange Commission to agree that the company can leave the shareholder proposal off its proxy statement, which shareholders will vote on at its 2014 annual meeting. The request came in a letter to the SEC, which The New York Times reported on Friday.
AT&T argued that it can throw out the proposal for several reasons, the central one being that it relates to its "ordinary business operations." In addition, AT&T said the proposal relates to ongoing litigation and doesn't focus on a significant policy issue, among other things.
Companies are allowed to reject shareholder proposals that affect ordinary operations because it isn't practical to let shareholders decide how to deal with those kinds of issues at an annual meeting, AT&T told the SEC. Privacy mechanisms fall under that rule, the company said.
"Management is in the best position to determine what policies and procedures are necessary to protect customer privacy, to ensure compliance with applicable legal and regulatory requirements in the states and countries in which we operate, and to apprise AT&T customers of the steps that are taken to protect their privacy," the letter said.
The carrier also argued to the SEC that the issue of carriers' disclosures to the government "has not been raised to the level of 'consistent topic of widespread public debate,' i.e. 'sustained public debate over the last several years,'" because all the news articles cited in the shareholders' proposal were published after June 2013.
AT&T's response to the proposal stands in sharp contrast to the ways in which Google and other online companies have reacted to news about government snooping.