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Shareholder Activists (Including a Beastie Boy) Win Net Neutrality Victory Over AT&T

The Beastie Boys may have finished what the FCC started. One Beastie Boy, anyway. And Phil Kerpen of Americans For Prosperity is not happy about it.

Photo Credit: Michael Morel via Flickr


 The Beastie Boys may have finished what the FCC started. One Beastie Boy, anyway. And Phil Kerpen of Americans For Prosperity is  not happy about it.

First, the backstory. On February 10, the Securities and Exchange Commission  informed AT&T that they would not be allowed to block shareholders from voting on a proposal requesting that the telecom giant commit to operating its wireless data network in accordance with net neutrality principles. That proposal was put forth by an asset management firm  representing Michael Diamond, a.k.a. Mike D of the Beastie Boys, and other AT&T investors.

The SEC's ruling was significant because the net neutrality order passed by the FCC in December 2010 contained a  huge carve-out for wireless broadband. Wireless providers were exempted from the "unreasonable discrimination" rule which prevents fixed broadband providers from discriminating against or favoring certain forms of content based on political or financial considerations. The FCC argued they needed to "better understand how the mobile broadband market is developing before determining whether adjustments to this framework are necessary."

In the past the SEC has allowed wireless carriers to block shareholder votes on net neutrality, agreeing with the companies that it was a matter of "day-to-day" business and thus outside shareholder oversight. In the February 10 letter, the SEC argued that net neutrality had become AT&T's "most significant public policy issue," owing to the many legislative and regulatory battles it has sparked over the past year, and is thus "appropriate for shareholder consideration."

Enter Phil Kerpen. In a op-ed published today, Kerpen lambasted the SEC as a "rogue agency" and lashed out at the usual suspects:

Left-wing activists have long viewed corporate boardrooms as an alternative venue to accomplish radical policy objectives that lack the public support needed to advance through the legislative process.  Extreme environmentalists have pushed their philosophy through that mechanism, as have  union bosses, through the use of so-called corporate campaigns to strong-arm and intimidate corporations. [...] The strategy was outlined by Saul Alinsky in his classic "Rules for Radicals." [...] Last week, the SEC handed  the Alinkskyites a very surprising victory, up-ending all relevant precedents that preclude shareholder questions on routine business matters. [...] The ideological godfather of the so-called media reform movement,  an avowed Marxist college professor named Robert McChesney, founded the pressure group  Free Press to push for these regulations. McChesney's group receives considerable funding from the Nathan Cummings Foundation, the left-wing funder that sponsored the network neutrality shareholder proposals approved by the SEC.

Kerpen was shooting kind of wildly, and thus missed the real target. The advocacy group behind the shareholder initiative was actually the  Open Media and Information Companies Initiative, which is a project of the Tides Foundation. Kerpen went after Free Press simply so he could play the Marxism card. (Attacking McChesney is a  prerequisite for conservative commentary on net neutrality.)

Even though we're already awash in culpable parties, I might suggest one more: Phil Kerpen. After all, the SEC justified their shift on net neutrality by saying that it was "a consistent and hotly contested topic of policy debate in Washington, in the press, in academia, and in local communities throughout the country," and Americans For Prosperity has done more than any other right-wing group to elevate the battle over net neutrality.

When describing the national relevance of the net neutrality debate, the SEC specifically cited:

"The House of Representatives voted to prohibit the FCC from using funds to carry out net neutrality regulations created in December 2010." (AFP sent  letters to House membersencouraging them to support the Walden Amendment, which would have cut off funds to the FCC, "or any amendment with a similar effect.")

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