Thanks EU! Netflix Should Benefit From This Net Neutrality Change

The EU rules in favor of net neutrality, creating an opportune environment for Netflix, Inc. as it pursues global expansion.

Tim Beyers
Tim Beyers
Apr 8, 2014 at 10:50AM
Technology and Telecom

Tough new rules enforcing net neutrality could make it easier for Netflix, Inc. (NASDAQ:NFLX) to cost-effectively compete for business in the European Union, Fool contributor Tim Beyers says in the following video.  

Specifically, EU lawmakers enacted new policies that not only guarantee equal access for all netizens but also reduced cell phone roaming charges throughout the 28-member union. A final vote is due in May, but most signs suggest that regulators will stick with the plan as it was passed in the European Parliament last week.

For Netflix, Tim says the new rules guarantee the company's streams will travel across the continent unimpeded. Direct-access deals similar to what Netflix has with Comcast (NASDAQ:CMCSA) in the U.S. shouldn't be necessary in the EU.

Yet it's the timing of the changes that matter more than anything else. Netflix has long had designs on expanding its European operations beyond the U.K., Scandinavia, and the Netherlands. EU countries, meanwhile, want more of what the streaming king has. Take House of Cards, which has proved to be a particularly attractive target of illegal streamers in Poland, France, Greece, and Spain, among others, according to data compiled by Variety.

Tough, carefully crafted net neutrality regulations should allow Netflix to turn those digital miscreants into customers, pleasing investors in the process. Do you agree? Or would you rather see the company concentrate its efforts elsewhere? Please watch the video to get the full story, and then leave a comment to let us know what you think, including whether you would buy, sell, or short Netflix stock at current prices.