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Netflix CEO Says U.S. Rollback of Net Neutrality Rules Is No Big Deal

Reed Hastings says consumers worldwide now have an 'expectation' of net neutrality

Netflix chief Reed Hastings — who has been an ardent and vocal supporter of net neutrality rules to ensure service providers don’t discriminate against internet content companies — said the U.S. reversal on net neutrality won’t have an impact on the streamer’s business.

“Around the world, net neutrality has won as a consumer expectation,” Hastings said, speaking in a post-Q2 earnings announcement interview hosted by Netflix. “I would say the net neutrality advocates have won the day, in terms of those expectations, so we don’t see any changes of that in the U.S. or other countries.”

Last December, when the Federal Communications Commission voted along party lines to repeal the Obama-era rules, Netflix came out firmly against the decision.

“We’re disappointed in the FCC’s decision to gut the net neutrality protections that ushered in an unprecedented era of innovation, creativity and civic engagement,” Netflix said at the time. “Netflix will stand with innovators, large and small, to oppose this misguided FCC order.”

This past May, the U.S. Senate passed a resolution to restore the FCC’s net neutrality rules but that would still need approval by the House and to be signed by President Donald Trump, who has opposed the need for net neutrality. Trump’s pick for the U.S. Supreme Court, Brett Kavanaugh, has expressed strong opinions against net neutrality.

In years past, Hastings himself has argued strongly in favor of net neutrality laws. In 2014, the CEO weighed in on a court defeat nullifying the Obama administration’s Open Internet rules at the time (after a legal challenge by Verizon), saying in a letter to shareholders that Netflix would “vigorously protest and encourage our members to demand the open internet they are paying their ISP to deliver.”

Since then, Netflix has grown its subscriber base dramatically and has cut direct deals with ISPs including Comcast to guarantee dedicated bandwidth for its video traffic.

On Monday, Hastings said that regardless of whether any given country has net-neutrality laws, “broadly, around the world, consumers have the expectation [of net neutrality] and ISPs are delivering it.”

Hastings’ comments downplaying the impact of the U.S.’s reversal on net neutrality came after Netflix missed its Q2 subscriber forecast target by about 1 million. That sent the company’s historically volatile stock down 14% in after-hours trading Monday.

Despite the shortfall, Netflix ended the quarter with 130.1 million global streaming customers, up 25% year over year, and for the first time ever generated more revenue abroad than in the U.S.

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