Netflix Could Rally Its 34 Million Members to Uphold Net Neutrality In a letter to investors, the streaming leader vowed to fight a ruling last week that overturned net neutrality laws. Netflix also announced its stronger-than-expected earnings.

By Geoff Weiss

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.

Netflix is threatening to rally its roughly 34 million domestic users against a hotly contentious ruling last week overturning laws that heretofore stated all data on the internet should be treated equally.

The ruling by the U.S. Court of Appeals against net neutrality in a case brought by Verizon against the FCC means that service providers can now theoretically charge inflated fees to companies like Netflix, for instance, whose video streaming facilities require more bandwidth.

Translation: the end of net neutrality could hypothetically mean that streaming quality diminishes or that consumers must pay more to ensure that streaming bandwidth remains high.

"Were this draconian scenario to unfold with some ISP, we would vigorously protest and encourage our members to demand the open internet they are paying their ISP to deliver," Netflix pledged in a letter to investors.

At the same time that it is primed for battle, Netflix also expressed doubts that providers would choose to tread "this consumer-unfriendly path of discrimination" given "broad public support for net neutrality." The company also reasoned that it works closely with providers, whose consumers frequently purchase higher bandwidth packages precisely to stream the kinds of high-quality videos that Netflix provides.

Related: We're a Country of Binge-Watchers, and We Feel Pretty Good About It

But veiled threats against service providers was not the sole purpose of the company's letter to investors, dated January 22, where Netflix also released its fourth quarter earnings. Following the announcement that the company had added 2.33 million domestic users in the quarter, shares surged almost 18 percent this morning.

Netflix also disclosed that it is in the process of rejiggering its pricing tiers after introducing an $11.99 per month option last April that covers four concurrent users. (For $7.99, two users can receive unlimited viewing.) "Since late last year, we have also been testing one-stream and three-stream variants ... at various price points," the company said.

It cautioned, however, that it was "in no rush to implement such new member plans," adding, "If we do make pricing changes for new members, existing members would get generous grandfathering of their existing plans and prices."

Related: U.S. Court of Appeals Overturns Net Neutrality

Geoff Weiss

Former Staff Writer

Geoff Weiss is a former staff writer at Entrepreneur.com.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Editor's Pick

Related Topics

Growing a Business

5 AI Hacks You Need to Know About in 2024

Despite its vast potential, the key to leveraging AI effectively lies in balancing automation with human oversight to avoid pitfalls and ensure that creativity and decision-making remain human-driven.

Business News

Former Pediatrics Professor Donates $1 Billion, Makes Albert Einstein College of Medicine Tuition-Free

Dr. Ruth Gottesman's husband left her $1 billion in Berkshire Hathaway stock with the following instructions: "Do whatever you think is right with it."

Starting a Business

Long-Lost Sisters Who Built the Largest Black-Owned Wine Company in the U.S. Reveal How to Break Into a Notoriously Tough Industry

Andréa and Robin McBride followed their shared love of wine into business — but it hasn't always been easy.

Business News

'Next Tesla' Electric Car Startups Hit Speed Bump: 'Investors Want To See Demand'

Electric vehicle companies large and small, from Ford to Tesla to Rivian, are dealing with cooler-than-expected demand for EVs.