The upshot of last week’s federal appeals court ruling that tossed out the core of the FCC’s net neutrality rule is that Internet Service Providers can now impede access to competing or data-hogging websites by downgrading or blocking these content providers. Netflix, the country’s single largest devourer of bandwidth, had been relatively quiet on this ruling, until yesterday, when it shared its view of the future of net neutrality with investors.

In its quarterly earnings report [PDF], Netflix dedicates an entire section to the issue of net neutrality (see p. 6 of the report).

“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,” explains the company. “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.”

That said, the company believes that this potential for consumer blowback and how it would likely “galvanize government action” to reinstate net neutrality, is enough for ISPs to “avoid this consumer-unfriendly path of discrimination.”

Interestingly enough, Netflix does specifically call on legislators or the FCC to right the errors of those who originally crafted net neutrality but failed to see the obvious ways in which it would fail a legal challenge.

“In the long-term, we think Netflix and consumers are best served by strong network neutrality across all networks, including wireless,” explains the company. “To the degree that ISPs adhere to a meaningful voluntary code of conduct, less regulation is warranted.”

Netflix does end this section of the report with a caveat that it’s not ruling out the possibility that government intervention might be required: “To the degree that some aggressive ISPs start impeding specific data flows, more regulation would clearly be needed.”

[via The Verge]

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