Support Comes as FCC Weighs New Network Neutrality Rules
A shareholder proposal calling on Verizon Communications Inc. (NYSE:VZ) to report on business risks arising from the company’s opposition to open Internet and network neutrality principles has gained important new support from investors, winning 26.4% of the vote at Verizon’s annual meeting on May 1.
The vote comes as the Federal Communications Commission considers the possibility of new open Internet rules to be introduced by Chairman Tom Wheeler at a commission meeting on May 15. Net neutrality is the principle that all Internet traffic should be treated equally and that Internet providers cannot block, speed up or slow down content for any reason.
The shareholder proposal, which was filed by the Nathan Cummings Foundation, asks Verizon to issue a report on “how Verizon is responding to regulatory, competitive, legislative and public pressure to ensure that its network management policies and practices support network neutrality, an Open Internet and the social values described [in the proposal].”
This year’s vote, reported by Verizon in a filing with the Securities and Exchange Commission, represents $30.6 billion in Verizon shares for the proposal. The 26.4% for the proposal marks an increase from 24.1% last year.
“This increased vote clearly indicates that a growing number of shareholders agree with us,” said Laura Campos, director of shareholder activities at the Nathan Cummings Foundation. “The Foundation sponsored this proposal because we think an open Internet is critically important to both Verizon’s long-term business and the economic health of the country.”
Jonas Kron, Senior Vice President at Trillium Asset Management, LLC, which has previously co-sponsored network neutrality proposals at Verizon, said, “In considering its next steps we urge the FCC to consider how net neutrality is critical to economic growth that benefits diversified investors."
The shareholder proposal noted that “open Internet policies help drive the economy, encourage innovation and reward investors. Network neutrality principles may help Verizon financially by bringing new products to its platform, attracting customers and creating opportunities to share revenue with developers.” At the same time, the proposal said, an open Internet “also has particular importance for minority and economically disadvantaged communities, which rely on wireless more than other demographic groups.”