| LOS ANGELES
LOS ANGELES Jan 15 Shares of video streaming
service Netflix Inc fell more than 1 percent on
Wednesday, a day after a U.S. court decision that could let
broadband providers charge companies for faster access to
content delivered over the Internet.
On Tuesday, the U.S. Court of Appeals for the District of
Columbia Circuit rejected federal "net neutrality" rules that
required Internet providers to treat all web traffic
The decision appeared to pressure Netflix stock, Standard &
Poor's equity analyst Tuna Amobi said. The stock was down 1.8
percent at $332.02 in mid-afternoon trading on Nasdaq. Earlier,
the stock fell as much as 5.9 percent to a session low at
"We see potential specter that (Netflix) and other
bandwidth-intensive sites may be vulnerable to the whims of
broadband service providers, with potentially inherent cost
disadvantages, or other quality degradation for its user
experience vs. competitors," Amobi said in a research note.
"Still, we doubt the court ruling spells finality for a
highly controversial issue that the FCC could further shape
within its domain mandate," Amobi said.
A Netflix spokesman had no comment.
The FCC could appeal the ruling to the full appeals court
or to the U.S. Supreme Court, something FCC Chairman Tom Wheeler
said he is considering as among "all available options" to
ensure Internet networks remained free and open.
Video streaming is by far the heaviest bandwidth hog on the
Internet. Netflix and Google Inc's YouTube alone are
estimated to account for more than half of all downstream
Internet traffic at peak hours.
All major broadband providers on Tuesday issued statements
pledging no policy changes because of the ruling and no plans
for restrictions on how people use the web on their networks.
AT&T Chief Executive Officer Randall Stephenson repeated
that commitment on Wednesday.
"We will continue to abide by those rules, and I don't see
it changing much in the short run," Stephenson said at a
Christian Science Monitor breakfast with Business Roundtable in
Evercore Partners analyst Alan Gould said Tuesday's court
decision was a "small negative" for Netflix because the company
may incur new costs to ensure its movies and TV shows are
treated equally on the Internet. Any new costs would be
"manageable," he said.
"With 30 million (U.S.) subscribers, it would be really
difficult for the distributors to disadvantage Netflix without a
real customer revolt," Gould said.
Netflix was one of the year's best stock performers in
2013, surging 297.6 percent as the company added new customers
in the United States and overseas.
BTIG analyst Rich Greenfield said he believed fears that
broadband providers would start charging for Internet fast lanes
were "far, far overblown." He said it wouldn't make sense for
the companies to anger customers by slowing popular content from
sites such as Netflix and YouTube.
"While there is certainly danger of bad behavior in the
(Internet service provider) world now that net neutrality rules
have been struck down, we believe economic logic will prevail,
limiting abuses," Greenfield said in a blog post titled "Don't
Believe Chicken Little: The Free and Open Internet is Not in
(Reporting by Lisa Richwine in Los Angeles; Additional
reporting by Alina Selyukh in Washington; Editing by Jan