Netflix lists net neutrality demands to FCC amid mixed Q2 earnings

Netflix lists net neutrality demands to FCC amid mixed Q2 earnings

Summary: Netflix also has some ambitious goals for the third quarter, propelled by recent international launches in Europe and South America.


The Federal Communications Commission closed the forum for the first round of public opinion on net neutrality last week, but Netflix hasn't abandoned its soapbox just yet.

CEO Reed Hastings has been a vocal proponent for an open Internet without restrictions, or "artificial slow lanes," for delivering select types of traffic on broadband channels.

The online video giant's founder reiterated those sentiments as well as a few "goals," or even demands, to the FCC amid Netflix's mixed second quarter earnings report published on Monday after the bell.

In a memo signed by Hastings and CFO David Wells, Netflix leaders wrote:

Our focus on strong net neutrality, including interconnection, is about preventing large ISPs from holding our joint customers hostage with poor performance to extract payments from us, other Internet content firms, and Internet transit suppliers such as Level 3 and Cogent.

Our policy goals are for the FCC to not sanctify paid prioritization, and for the DOJ/FCC to block the merger of Comcast/TWC, or at the very least, to require as condition to approving the merger that the combined entity be prevented from charging for interconnection.

The Los Gatos, Calif.-based company reported a net income of $71 million (statement). Non-GAAP earnings were $1.15 per share on a revenue of $1.34 billion.

Wall Street was expecting earnings of at least $1.16 per share on a revenue of $1.33 billion.

Nevertheless, Netflix earnings started to climb in after-hours trading given that earnings more than doubled from the same quarter last year despite not squarely hitting the analyst target.

Netflix also netted approximately 1.69 million new subscribers during the quarter, bringing the worldwide grand total of current monthly subscribers to 50.05 million.

Netflix has ambitious plans for the following quarter, projecting to add 3.69 million more subscribers over the following three-month period for an approximate grand total of 53.74 million globally.

Both Q2 and Q3 user count growth is being propelled by international expansion. Feeding off successful launches in Finland and Argentina, Netflix is moving into Germany, France, Austria, Switzerland, Belgium, and Luxembourg in September.

Also looking ahead, analysts expect Netflix to deliver Q3 earnings of $1.06 per share on a revenue of $1.38 billion.

Topics: Networking, Broadband, Telcos, Tech Industry

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  • Netflix Shortsighted Cronyism

    I like Netflix but I am bother cronyism by the CEO. He wants the providers to upgrade their networks at their cost for Netflix benefit. The problem is Netflix needs to be careful, in regards of government regulation; be careful what you ask for you may get it: an open, price controlled, highly regulated, slow, congested internet. In the history of the regulation, regulation impedes innovation. If Netflix want a fast net for 4K then they need to pay up in a free market or go out business.
    • We'll take our chances

      "be careful what you ask for you may get it: an open, price controlled, highly regulated, slow, congested internet"

      That's basically what we have now sans a select few cities like Provo, Austin, Kansas City, and Chattanooga. I'm sorry but the threat from ISP's of a slow, congested internet pending Title II regulation is an empty threat if I ever saw one.

      It's like being shot by a person with one bullet left in their clip after which they say 'if you do 'x' I'll shoot you.' Umm you already did.

      "In the history of the regulation, regulation impedes innovation"

      True, but more times then not monopolies and oligopolies are exponentially worse then regulation in a developed country.

      Regardless Europe has already provided the model for us. Affordable high speed networks with numerous options, built with very little if any government money (ie private capital). All with laws that encourage free market competition.

      Compare that to the US where people are limited to one or two legitimate high speed options (>18Mbps and thats being kind) in major markets no less. Honestly being limited to one or two provider for a product or service sounds a bit like Soviet Russia if you ask me.
  • Greed, Greed, Greed!!

    As a consumer, I pay a monthly fee to my ISP for a connection. As long as I stay within my data cap, what right does my ISP have to charge extra if I should choose to use Netflix, Hulu, Crackle or whatever? They should be using those monthly fees to upgrade the system, but oh that might cut into their profits. They could charge more or reduce data caps. But then Competition would rear its ugly head and people would switch providers. Instead they want to add more and more subscribers to the same outdated system rather then upgrade. System maintenance is a significant cost of doing business. They want nothing more then to gouge customers, squeeze every penny out of an old obsolete system, rather then fix it. ISP's in other nations can do it why can't they do it here.
    Oh forgot, this is america where profits rule, and its SOP to bribe the government with tax right off "political donations" rather then use those same resources to fix the problem.