Verizon Investors Urge Company to Support New Network Neutrality Rules
FEBRUARY 25, 2015: Investors in Verizon Communications Inc. (NYSE:VZ) today welcomed the Federal Communications Commission’s anticipated adoption of new network neutrality rules and urged Verizon to do the same by publicly committing not to initiate or support litigation that would undercut the rules.
A shareholder proposal asking Verizon’s board to report on the risks to the company posed by its continuing opposition to net neutrality is to be voted on at the company’s 2015 annual meeting in Minneapolis on Thursday, May 7th. A similar proposal last year won 26.4% of the shareholder vote, representing $30.6 billion of Verizon shares.
Verizon executive vice president and chief financial officer Francis J. Shammo in December advised securities analysts that the company anticipated “a very litigious environment” if, as anticipated, the FCC were to reclassify broadband Internet under Title II of the Communications Act. Verizon previously sued to block a prior set of net neutrality rules.
Jonas Kron, Senior Vice President at Trillium Asset Management, LLC, a co-sponsor of this year’s shareholder proposal, said:
“We are delighted that the FCC seems poised to re-classify broadband as a common carrier under Title II of the Communications Act, ensuring equal access to all websites by treating the Internet like a public utility. Since 2010, and most recently in August 2014, investors such as Trillium Asset Management have argued that net neutrality and Title II regulation is in the interest of diversified investors, our economy and Internet Service Providers. It is gratifying to see the FCC adopt a policy that is consistent with our advocacy and gives us renewed faith in the political and regulatory process. Verizon investors now turn to the company’s upcoming annual meeting and the net neutrality shareholder proposal on the ballot. Now is the time for investors to let management and the board know about their support for net neutrality. As we have noted in the past, Verizon senior management has completely mismanaged its approach to net neutrality: articulating inconsistent positions, wasting resources on litigation, and exaggerating the negative consequences of net neutrality.”
Michael Connor, Executive Director of Open MIC, a non-profit organization that works with companies and investors to foster more open and democratic media, said he feared that even if Verizon did not initiate legal action to block the new FCC rules, it would support similar action by another company or an industry trade association.
“Verizon repeatedly says it favors what it calls an ‘Open Internet,’ yet the public record demonstrates that the company aggressively employs tactics that work against that principle,” Connor said.
“Over the past year, more than four million Americans – many of them Verizon customers – have written to the FCC to express support for regulation of the Internet under Title II,” Connor added. “Verizon should take note and – for a change – exercise true corporate leadership by agreeing to abide by the FCC rules and encouraging others to follow suit.”
Trillium’s Kron noted that in recent weeks, two of Verizon’s leading competitors – Sprint and T-Mobile – have publicly indicated that the anticipated Title II regulation would likely not present a threat to their business and would likely not reduce their investments in broadband network infrastructure. “The message is simple: net neutrality is good for business and the nation’s economy,” Kron said.
For more information: Michael Connor, Executive Director, Open MIC, firstname.lastname@example.org, 212-875-9381
Open MIC, the Open Media and Information Companies Initiative, is a non-profit organization which works with companies and investors to foster more open and democratic media in the U.S.
Trillium Asset Management is an investment management advisor exclusively focused on sustainable and responsible investing, with over $2.2 billion in assets under management.
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