25 Texas cities sue Disney+, Hulu, Netflix over franchise fees – Spectrum News
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TEXAS — The City of Rowlett has joined 24 others cities across the Lone Star State in suing streaming services including Disney+, Hulu and Netflix for failing to pay franchise fees as far back as 2007.
According the Texas Standard, franchise fees are payments made by traditional cable providers to cities and counties in exchange for using the local cable infrastructure. Streaming services don’t have to pay those fees, and as more people move away from traditional TV to streaming services, cities and counties are losing revenue.
Joining Rowlett are large cities like Irving, Dallas, Frisco, Houston, Austin and Arlington. Their hope is to collect these franchise fees, stating that streaming companies are required by the Texas Public Utility Regulatory Act (PURA) to pay these annual fees and fund basic city services.
“With this lawsuit, we hope to ensure streaming video companies’ compliance with their PURA obligations moving forward and also recoup unpaid franchise fees from the Disney, Hulu, and Netflix streaming services as follow-on relief,” said Rowlett Mayor Blake Margolis. “Franchise fees are an important source of city revenue. We have an obligation to our residents to ensure that these companies comply with state law and pay what is owed to the City of Rowlett.”
Under PURA, a video service provider is obligated to pay a 5% franchise fee is the video service is delivered via wireline facilities such as utility poles over the streets. According to a news release by the City of Rowlett, these fees help fund public safety and road repairs throughout the city.
“Disney, Hulu and Netflix have long withheld statutorily required payments to cities throughout Texas, depriving them of fees that help fund essential city services,” said law firm McKool Smith principal Steven Wolens, who along with co-counsel represents the Texas cities in this lawsuit. “This case was filed on behalf of our municipal clients to ensure future compliance with PURA and recoup significant fees owed by some of the nation’s largest streaming services.”
The City of Rowlett is seeking reimbursement from the annual franchise fees as well as interest from Disney+, Hulu and Netflix since the time each began their streaming services in Texas.
via Inferse.com https://www.inferse.com
August 4, 2022 at 05:19AM