A group of Verizon shareholders is criticizing the broadband provider's stance on net neutrality, saying the company's positions on the issue could harm its reputation and commercial success.

The proposal by the Nathan Cummings Foundation and Trillium Asset Management LLC is being submitted for consideration at Verizon's annual meeting, which is typically held in April or May. A previous version of the same proposal was submitted last year and "won 26.4 percent of the shareholder vote—representing $30.6 billion of Verizon shares," an announcement today said.

The proposal states, in part:

Verizon’s stated position regarding network neutrality has been inconsistent and contradictory. Company representatives have expressed clear support for “paid prioritization” of Internet content, according to published reports. Verizon wants a “two-sided market” involving payment for Internet service by subscribers and by the companies who want to reach them, Verizon lawyer Helgi Walker told a federal appeals court in September 2013. Yet in October 2014, Verizon’s corporate web site stated that Verizon “has no plans to undertake the hypothetical ‘paid prioritization’ business model.” As investors, we are confused by this ambiguity and troubled by the potential negative impact that paid prioritization could have on innovative technology start-ups, which drive so much economic growth. More than 3.7 million comments regarding network neutrality were filed with the Federal Communications Commission (FCC) in 2014, with the vast majority expressing support for net neutrality and concerns about paid prioritization. In November of 2014, President Obama urged the FCC to ban paid prioritization and reclassify broadband Internet under Title II of the Telecommunications Act. As investors, we are concerned about potential regulatory and legislative risk related to Verizon’s network management practices and the issue of network neutrality. There may also be reputational and commercial risk in not providing customers with evidence of open Internet policies that apply to wireless communications and preclude business models based on paid prioritization. Resolved: Shareholders request that the Board of Directors report by October 2015 (at reasonable cost and omitting proprietary and confidential information) how Verizon is responding to regulatory, competitive, legislative and public pressure to ensure that its network management policies and practices support network neutrality and an Open Internet.

The proposal goes on to say that "network management decisions could potentially affect future regulatory developments." In other words, Verizon's own actions could lead to regulatory problems. Shareholders should be given "sufficient information to evaluate how Verizon manages this significant policy challenge," the proposal says.

"It's increasingly evident that this issue can have significant implications for Verizon's business and, ultimately, shareholder value," Laura Campos, director of shareholder activities at the Nathan Cummings Foundation, said in the announcement. "As investors, we want to be sure Verizon is poised to effectively address this significant policy challenge, especially given its history of vigorous opposition to proposed network neutrality rules."

A Verizon spokesperson told Ars that "As a matter of policy, Verizon will not comment on any shareholder proposal before our Board’s recommendation is published in our annual meeting notice and proxy statement." Last year, Verizon's board of directors recommended that shareholders vote against the proposal, saying that "As a leader in developing an open architecture for accessing and using the Internet, Verizon’s position on all aspects of the 'network neutrality' debate has been consistently and publicly conveyed in mainstream and industry-related media, through legislative and agency fact-finding processes and in applicable agency and court filings."

Verizon sued the Federal Communications Commission to block network neutrality rules issued in 2010, and won the case in January 2014. The victory may backfire, however, as the FCC is considering reinstating the rules by reclassifying broadband providers as common carriers, potentially opening them up to stricter policies under Title II of the Communications Act. Verizon argues that common carrier rules will harm investment in broadband networks, but its critics point out that Verizon has used Title II regulations to its benefit in building out its fiber network.

The FCC is expected to vote on a new net neutrality proposal on Feb. 26.