The City of Irving is following in the footsteps of Dallas, Grand Prairie, Plano, and Frisco in bringing a lawsuit against streaming services Netflix, Hulu, and Disney+ over the use of public wires for streaming.
The City argues that streaming services should pay franchising fees because the stream is delivered to consumers through wires delivered in the public right-of-way.
Traditional cable companies such as AT&T would pay these fees; however over 54.4 million households in the United States are now non-pay TV households, which means those fees aren’t getting paid because of laws such as the Internet Tax Freedom Act that prohibits federal, state, and local taxation of email and Internet access.
This act has allowed Netflix and Hulu to win lawsuits against cities across the nation that tried to sue the streaming service over franchising fees. The judge in the Reno, Nevada case ruled that Netflix and Hulu aren’t “video service providers” because Netflix and Hulu have individual films and television shows that are “part of” the service and not the “entire service,” like traditional cable television is.
As it pertained to “public Internet,” the judge agreed with Netflix who used the analogy, “public parks are for the use and benefit of all, and merely requiring an individual to pay an entrance fee for park access does not make it less — or not — ‘public.’”
The Verge reported, “These cases falsely seek to treat streaming services as if they were cable and internet access providers, which they aren’t,” a Netflix spokesperson told the outlet. “They also threaten to place a tax on consumers that the legislature never intended, and we are confident that the courts will conclude that these cases are meritless.”
Now Irving will try their hand at suing the streaming giants and seek to collect franchising fees dating back to 2007, and according to city documents, will seek an order for payment of future fees.
