Should the FCC fail to get new net neutrality rules in place, Internet Search Providers (ISPs) can charge companies like Netflix for all data transmitted over their network, according to Wedbush analyst Michale Pachter. In a note, Pachter estimated that each hour of 1080p content streamed to a 40"-50" TV consumes 6.5GB worth of data. If ISPs choose to charge extra for services that use such large amount of data, Netflix's prices could increase according to Pachter.
Pachter expects the FCC to appeal to the Supreme Court, however.
Analyst firm Pacific Crest also weighed in on the net neutrality concerns, saying ISPs likely won't do anything to negatively impact Netflix or other services like Amazon (AMZN). Doing so would be a public relations nightmare according to the analysts. Broadband providers are more likely to throttle speeds for illegal downloads through services such as BitTorrent, they said.
TheStreet Ratings team rates NETFLIX INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate NETFLIX INC (NFLX) a HOLD. The primary factors that have impacted our rating are mixed ? some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and generally higher debt management risk."