Netflix Says It Will Rally Its Users to Fight For Net Neutrality — This is a Really Big Deal

The news: Netflix is standing up for net neutrality. Following last week’s federal court decision that all but spelled doom for the Federal Communications Commission’s restrictions on whether internet service providers could provide preferential treatment to certain content, Netflix has come out staunchly in favor of net neutrality regulation.

In a letter to shareholders, Netflix lamented the end of net neutrality:

"Unfortunately, Verizon successfully challenged the U.S. net neutrality rules. In principle, a domestic ISP now can legally impede the video streams that members request from Netflix, degrading the experience we jointly provide. The motivation could be to get Netflix to pay fees to stop this degradation. 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."

There it is: if the end of net neutrality leads ISPs to mess around with video streaming, Netflix will rally its users to protest. And there’s bite to Netflix’s bark: according to the shareholder letter, Netflix finished 2013 with more than 44 million users, and expect to approach 50 million in 2014. That’s 50 million pissed-off internet users rallying against net neutrality.

Though broadband providers might have welcomed the court’s decision against net neutrality last week, they might change their tune now that a major web power has come out strongly against it. Consistent, quality service depends on ISPs and content providers working together – the end of net neutrality could disrupt that. Netflix realizes this, and has gone on the record early to make it clear it won’t stand for any ISP discriminatory traffic preferences. 

Should internet providers be afraid? It’s unclear. Right now, Netflix depends on telecom giants like Time Warner and Comcast to connect with users. But Netflix is growing into a giant of its own – its stock rose to over $330 a share Wednesday – and has a lot of weight to throw around.

But there’s a lot at stake for Netflix: a decline in streaming quality could lead to a mass exodus of users. Which is why it’s making it clear now that it won’t take things lying down, and if ISPs plan to change the way they connects users to Netflix, they should expect a fight.