Netflix shares fell more than 5% Wednesday after analysts warned that a federal court ruling invalidating the FCC’s net neutrality regulations could lead to higher costs for the Internet-streaming company. On Tuesday, the U.S. Appeals Court for the D.C. District struck down key pieces of the Federal Communications Commissions’ Open Internet Order rules that forbade Internet service providers from discriminating or blocking traffic.
If there’s one major Internet company that may be threatened by a court ruling striking down net neutrality, it’s Netflix. On Tuesday, the U.S. Court of Appeals for the District of Columbia sided with Verizon and struck down key portions of the Federal Communications Commission’s (FCC) Open Internet rules, which mandated that broadband providers treat all web traffic the same. The ruling could open the door for providers like Verizon and Time Warner to charge bandwidth-heavy websites more to deliver their content to users. If this happens, businesses that serve video — services like YouTube, Hulu and Amazon Prime — would be hit hardest. And Netflix is by far the largest in terms of bandwidth, accounting for nearly a third of downstream Internet traffic in North America.