Source: Alistair Barr / USA Today
SAN FRANCISCO – Netflix may be exposed to higher costs in the wake of a major court decision that voided rules governing Internet access known as net neutrality.
On Tuesday, the U.S. Court of Appeals for the DC Circuit struck down FCC rules requiring Internet Service Providers, or ISPs, to be neutral in their restrictions on bandwidth. The move means ISPs will be allowed to charge content providers based on how much bandwidth they use, according to Michael Pachter, an analyst at Wedbush Securities.
“This ruling will impact those websites that transmit the most data, so sites that stream video content (particularly in high definition) will potentially feel the most significant impact,” he added in a note to investors.
Netflix is the leading streaming video provider on the Internet and regularly accounts for a notable chunk of the data flowing across the web, so Wall Street expects the company to be exposed to extra costs from this ruling.
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