Netflix (NFLX) Could Suffer Following Strike-Down of Proposed Net-Neutrality Rule (VZ) (T)
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Price: $610.56 --0%
EPS Growth %: +83.3%
Financial Fact:
Total cost of revenues: 1.53B
Today's EPS Names:
MAXN, CSTR, ACU, More
EPS Growth %: +83.3%
Financial Fact:
Total cost of revenues: 1.53B
Today's EPS Names:
MAXN, CSTR, ACU, More
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Netflix (Nasdaq: NFLX) is on watch Wednesday as a recent victory by Verizon Communications (NYSE: VZ) over the Federal Communications Commission's net-neutrality rules.
The FCC's rule, which was stuck down in the U.S. Court of Appeals in Washington, would have had Internet service providers (ISPs) treating all traffic equally, versus being able to give preference to companies willing to pay more for faster service. That could mean Netflix and similar companies would be subject to higher costs in order to provide subscribers with better service.
Along with Verizon, ISPs like AT&T (NYSE: T) and Time Warner Cable (NYSE: TWC) will now be able to charge Internet-focused companies more for preferred treatment, Bloomberg noted Wednesday morning.
While Google's (Nasdaq: GOOG) YouTube and Amazon.com (Nasdaq: AMZN) would see a hike in rates, the amount added to Netflix's bill would be in the hundreds of millions of dollars per year range, according to Wedbush. The analyst cited believes it would take at least a year for full effect, but Netflix customers will end up paying more.
Metflix currently charges streaming content subscribers $7.99 per month for access. Under the new plan, that rate might go up buy 80 cents per month, while HD content might cause bills to rise a $4.80 per month or more.
Shares of Netflix are lower in early trading.
The FCC's rule, which was stuck down in the U.S. Court of Appeals in Washington, would have had Internet service providers (ISPs) treating all traffic equally, versus being able to give preference to companies willing to pay more for faster service. That could mean Netflix and similar companies would be subject to higher costs in order to provide subscribers with better service.
Along with Verizon, ISPs like AT&T (NYSE: T) and Time Warner Cable (NYSE: TWC) will now be able to charge Internet-focused companies more for preferred treatment, Bloomberg noted Wednesday morning.
While Google's (Nasdaq: GOOG) YouTube and Amazon.com (Nasdaq: AMZN) would see a hike in rates, the amount added to Netflix's bill would be in the hundreds of millions of dollars per year range, according to Wedbush. The analyst cited believes it would take at least a year for full effect, but Netflix customers will end up paying more.
Metflix currently charges streaming content subscribers $7.99 per month for access. Under the new plan, that rate might go up buy 80 cents per month, while HD content might cause bills to rise a $4.80 per month or more.
Shares of Netflix are lower in early trading.
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