Streamers defeat Texas cities in court in broadband fees case
Streamers defeat Texas cities in court in broadband fees case
Disney streamers and Netflix have beaten back a proposed fee sought by 31 Texas municipalities.
Several American streaming services are in court currently, battling various cases as they try to reshape the media landscape and the laws that govern it. Disney+, Hulu, and Netflix have scored a major legal win, collecting a unanimous decision from a Texas appeals court that declined to allow Texas cities to collect fees from the streamers for content distribution.
Key Details:
- Not hearing it: The appeals court declined to reconsider a previous ruling in streamers’ favor.
- Out of luck: A group of 31 Texas municipalities had sought to charge streamers fees for using broadband facilities they manage.
- Not the same: The ruling confirms a January 2024 decision that found streamers don’t have to pay because they aren’t under a franchise agreement.
By a unanimous 3-0 vote, the appeals court in Dallas confirmed it would not reconsider a previous ruling from a lower court that prevented a group of Texas municipalities from charging streamers for distributing content in their cities.
A group of 31 Texas metro areas, including Austin and Dallas, sued Disney Platform Distribution Inc., Hulu LLC, and Netflix Inc. for using broadband facilities managed by their respective municipalities without paying. Each city sought 5% of those platforms’ gross revenue from local operations.
In January 2024, courts ruled that streaming services aren’t required to pay such fees. Unlike cable providers, the ruling found, streaming services are not operating under a franchise agreement that allows them to use public infrastructure in exchange for franchise fees.
The case is just one in a tapestry of rulings from around the country in recent years governing the ways in which streamers interact with the localities in which they’re watched. Since 2015, Chicago has enforced a so-called “Netflix Tax” that levies tolls on customers for use of such services, and other states and cities are in various stages of deciding the best way to coexist with streamers.
Netflix isn’t out of the legal woods in the state of Texas. In May, the state sued the streamer, alleging that Netflix was using shady data collection practices to spy on kids. That case is still in the early stages, and a decision is likely still months in the future.
Netflix
Netflix is a leading subscription-based video streaming service that offers on-demand access to an extensive library of over 3,000 movies, 2,000+ TV shows, and a growing collection of acclaimed Netflix originals. Renowned for producing groundbreaking content, Netflix has become a cultural powerhouse with hit originals like “Stranger Things,” “Wednesday,” “Squid Game,” “The Crown,” “Tiger King,” “Bridgerton,” “The Witcher,” and “Black Mirror.”