Texas lawsuit against services like Netflix and Hulu grows
We’re getting the news from the world of streaming that services like Netflix and Hulu are facing a growing legal fight in Texas over those companies not paying cities fees.
The city of Austin is now joining that movement, with their city council voting Thursday in favor of joining other Texas cities attempting to recover what they claim to be years of unpaid fees from big video streaming companies, the Austin American-Statesman reports.
Why is the legal battle happening in Texas specifically? The Lone Star State law states that cable and video service providers are allowed to deliver services through transmission lines on public property only if they remit a 5% gross of their revenues to cities.
As far as streaming services like Netflix, Hulu, and Disney+ are concerned, they move their content through those lines but do not pay the fees normally imposed on cable TV providers. Austin and about a dozen other Texas cities are calling on the streaming companies to pay those fees just as any other cable provider would.
All of this lays the groundwork for what could become a long, drawn-out legal battle and mirrors similar litigation in Georgia, Indiana, Ohio, and Nevada. Franchise fee laws in those states were originally written to target cable providers and the forthcoming litigation is expected to suss out in the courts whether the fees may also apply to streaming companies.
It’s unclear how the various legal battles surrounding streaming might affect the consumer down the line, but at this point, any lasting changes that may arise likely won’t be felt for many months — if not many years — from now.