Verizon Shareholders Vote Down Neutrality Proposal -- Again
Last year, Verizon shareholders overwhelmingly voted against a net neutrality proposal.
Today, Verizon shareholders again nixed a neutrality proposal, also by a landslide, but a smaller one.
Specifically, a proposal requiring Verizon to report on potential risks posed by its legal challenge the neutrailty rules garnered the support of just 24% of shareholders today. Last year, a more strident neutrality proposal, which called for Verizon to commit to following open Internet principles, drew support of 8% of shareholders.
This year's proposal, backed by the Open Media and Information Companies Initiative and co-filed by Trillium Asset Management, LLC and the Nathan Cummings Foundation, focused on Verizon's legal challenge to the neutrality rules.
“Verizon is currently fighting network neutrality rules in a lawsuit against the FCC, thereby potentially tampering with the Internet as an engine of economic growth and possibly inflicting huge, costly risks on the U.S. economy, the global economy, under-represented communities and the public at large,” Trillim said in a letter to shareholders. The letter adds that Verizon's position “may present serious legal, regulatory, reputational and financial risks to the company.”
The Federal Communications Commission's neutrality rules prohibit all broadband providers -- wireline and wireless -- from blocking competing sites or apps. The rules also ban wireline companies -- but not wireless carriers -- from engaging in unreasonable discrimination.
Consumer advocates see those restrictions as fairly weak, but Verizon and Metro PCS thought the rules were onerous enough to warrant a legal challenge. The two companies are asking a federal appeals court to invalidate the rules.
If shareholders had voted differently today, Verizon would have been required to issue a report addressing the issues raised by Trillim. But the telecom wouldn't have had to change its legal position.
Still, the vote seems to show that some shareholders are at least questioning Verizon's decision to fight the neutrality rules.
Regardless of today's vote, many observers think that Verizon has a good chance of winning its legal challenge, given that the judges ruled in 2009 that the FCC lacks authority to regulate broadband. In that case, the appeals court vacated an order sanctioning Comcast for violating neutrality principles by throttling peer-to-peer traffic. The appellate court said that the FCC's order against Comcast was invalid because the agency had earlier classified broadband as an “information” service, and not a telecommunications service.