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SEC's 'rogue' ruling protects an open Internet

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 (Reuters)

Phil Kerpen’s recent Opinion piece for FoxNews.com, “SEC joins running for worst rogue agency” is typical of the type of double-speak engaged in by the author and Americans for Prosperity. 

Kerpen argues that the recent Securities and Exchange Commission (SEC) ruling allowing a democratic vote of shareholders, is an example of a federal agency going rogue. 

He also asserts that by submitting a shareholder proposal asking Internet service providers to commit to an open Internet, the Nathan Cummings Foundation and its fellow shareholders are attempting to undermine capitalism and turn the Internet into a nationalized, taxpayer-funded government network. While it is true that we would have no Internet without taxpayer and thus government investment, in this case nothing could be further from the truth.

In fact, as a long-term investor in a broad array of American companies, the Nathan Cummings Foundation has a vested interest in ensuring the continuation of the vibrant, open Internet environment that has allowed some of today’s most successful and innovative companies to grow and flourish. 

A free and open Internet is essential for economic growth. 

This concept should be in Mr. Kerpen's wheelhouse, but unfortunately, his extremist ideology has blurred his vision.

Far from forcing companies to include what Kerpen calls a “suicide proposal” in their proxy statements, the Nathan Cummings Foundation believes that by committing to operate their wireless broadband networks in accordance with an open Internet, companies like Sprint can honor principles such as freedom and liberty, help to protect their market share and enhance their reputations.

Kerpen’s piece also demonstrates a lack of understanding about the recent SEC decision – and about shareholder democracy in general. 

In finding that Internet Service Providers could not omit network neutrality proposals, the SEC did not, in fact, up-end all relevant precedents that preclude shareholder questions on routine business matters, although one wonders why a company’s owners should not have the right to ask questions about their company’s business. Rather, the SEC found that network neutrality is such a significant social policy issue that it transcends ordinary business.

“The Net” is all of us, now – we’re all affected by decisions made behind telecom companies’ doors. 

Americans overwhelmingly support an open Internet, with 76 percent of respondents in a Public Knowledge Poll saying the federal government should play a regulatory role. Freedom on this new, albeit virtual, frontier crosses partisan lines, but unfortunately Mr. Kerpen can't seem to shed his knee-jerk habits. This is a policy issue par excellence, and the SEC’s ruling recognizes that for the first time.

Each time America has approached a new frontier it has been our commitment to providing for the common defense, promoting the general welfare, and enhancing the blessings of liberty that have been in the forefront of our minds. On this new frontier we should be no different.

Policies ensuring Internet freedom were established for the wired, computer-based Internet 15 months ago, but wireless access, the fastest growing segment of Internet usage, was exempted. 

Yet if neutrality isn’t maintained for wireless devices as well – in other words, if Internet providers are free to charge different fees for different kinds of information, setting financial barriers that allow corporations to stream content into our lives more easily than, say, small businesses or non-profits – we won’t have free, equal access to information. Democracy itself depends on the free flow of information, and in this day and age, so does economic recovery.

Kerpen suggests that the SEC’s recent decision on network neutrality is an attempt to circumvent the legislative process, but he’s wrong on this count too. 

At a time when many question the lopsided power of bad actor businesses to act like bullies within the halls of government it’s important to recognize the true implications of the SEC decision: 

Shareholder engagement plays a vital role in promoting corporate decision-making that both comports with our values and helps to protect the investments that will fund our retirements and pay for our children’s educations.

In appealing to the SEC to allow them to omit proposals on Internet freedom, Sprint, AT&T and Verizon were attempting to stifle shareholders’ voices on an issue with important implications for all of us. 

You would think that it would be this that Kerpen, so avowedly concerned with the preservation of freedom and democracy, would find so outrageous. 

After all, America can only be truly prosperous when Americans have freedom, access and opportunity.

Simon Greer is the President and CEO of the Nathan Cummings Foundation, a private foundation with a long history of supporting innovation, investing in solutions and advancing shareholder rights. Laura Campos is the director of shareholder activities at the Foundation.