Netflix tumbles as Street mulls net neutrality ruling

|By:, SA News Editor

After trading sideways yesterday (in the face of a market rally) following an appeals court's decision to throw out the FCC's wireline net neutrality rules, Netflix (NFLX -4.9%) is diving today.

Wedbush's Michael Pachter (Underperform) thinks ISPs could try to charge Netflix and others a fee for every GB of data transmitted over their networks. He notes each hour of SD and 1080p video streamed by Netflix to 40"-50" TV sets respectively consumes 1GB and 6.5GB of data.

Though services such as Netflix drive demand for high-speed connections, U.S. ISPs (many of whom double as pay-TV providers) have nonetheless been upset over the streaming giant's heavy data consumption. Netflix has been trying to address the issue via its Open Connect CDN, but not all major ISPs are on board.

FCC chairman Tom Wheeler has already said his agency might appeal yesterday's ruling, so as to guarantee "networks on which the Internet depends continue to provide a free and open platform for innovation and expression."

Wheeler previously suggested Netflix could pay ISPs to guarantee subscribers "receive the best possible transmission." But he also reiterated his opposition to allowing ISPs to block/limit services.