The boards at AT&T Inc., Sprint Nextel Corp. and Verizon Communications Inc. have slammed shareholders' proposals that ask the companies to adopt "Net neutrality" rules that would be more stringent than those currently required under federal regulations.
The proposals generally ask the mobile-phone giants to refrain from degrading or prioritizing any traffic over their wireless networks.
AT&T shareholders last week overwhelmingly voted against the proposal, with only 5.9 percent of the votes in favor of it, according to the company's preliminary results.
Next up: a Net neutrality vote Thursday before Verizon's shareholders. Shareholders who co-sponsored the proposal include Margot Cheel c/o Trillium Asset Management Corp. (owner of 750 Verizon shares), The Nathan Cummings Foundation (4,895 shares), Benedictine Sisters of Mount St. Scholastica (357 shares) and St. Scholastica Monastery (100 shares).
The proposal has asked Verizon to publicly commit to adopt net neutrality principles without forfeiting any related issue in litigation. Verizon has challenged Federal Communications Commission "Net neutrality" rules in an appeal that is pending before a federal court in Washington, D.C.
The shareholders want the nation's largest mobile-phone company to "operate a neutral network with neutral routing along the company's wireless infrastructure such that the company does not privilege, degrade or prioritize any packet transmitted over its wireless infrastructure based on its source, ownership, or destination."
Proponents of the proposals cite the need to preserve the openness of the Internet for millions of Americans, including minorities who are more likely to access the Web on a cell phone, according to at least one study from the Pew Research Center.
In a proxy statement, Verizon declared the FCC actually rejected such a proposal in its Net neutrality rules, which is officially known as its Open Internet Order. The order was adopted in December 2010 but didn't go into effect until November 2011.
"The proponents appear to have no concept of the negative technical and operational ramifications of requiring purely 'neutral' routing of Internet traffic," Verizon asserted in the proxy statement. "This proposal would substantially interfere with the technical operation of Verizon's wireless broadband network and have a wide-ranging and significant impact on Verizon's business and operations."