Lawsuit claims Disney, Hulu, Netflix owe Texas cities for unpaid fees

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A lawsuit filed Thursday by 25 Texas cities claims that Disney, Hulu and Netflix have for years stiffed the cities out of {dollars} the streaming giants are required to pay beneath state regulation — and now cities are coming to gather.

Austin, Houston, Dallas and Fort Worth are among the many cities that sued the streaming providers in Dallas County to recuperate cash they are saying they has been owed since 2007 and to require the providers to pay every year going ahead. Under state regulation, the providers should pay cities a franchise price — which conventional cable suppliers additionally pay — in change for utilizing communication traces over public rights of approach to transmit their providers into properties.

As extra individuals abandon cable subscriptions in favor of streaming providers, cities have misplaced franchise price income — cash that goes to fund metropolis providers like police and fireplace safety in addition to roads, parks and libraries.

Cities haven’t made up that income with fees from streaming providers, mentioned Steven Wolens, a former Texas lawmaker and lead lawyer for the cities. Even although state regulation classifies them as video service suppliers that should pay the fees, the key streamers haven’t paid cities a dime, Wolens mentioned.

“They should have been paying this fee from the very beginning,” Wolens mentioned. “Shame on them because they are using the public right of way that every other company pays the city to use.”

Exactly how a lot the streaming giants owe Texas cities isn’t recognized, Wolens mentioned. For a smaller metropolis, the losses might quantity within the a whole lot of hundreds of {dollars}, he mentioned. For a bigger metropolis, that determine may very well be within the thousands and thousands.

Other Texas cities that joined the lawsuit are Abilene, Allen, Amarillo, Arlington, Beaumont, Carrollton, Denton, Frisco, Garland, Grand Prairie, Irving, Lewisville, McKinney, Mesquite, Nacogdoches, Pearland, Plano, Rowlett, Sugar Land, Tyler and Waco.

The cities are in search of funds relationship to when the providers launched — Netflix in 2007, Hulu in 2008 and Disney+, The Walt Disney Co.’s streaming service, in late 2019. Their subscriber bases quantity within the tens of thousands and thousands worldwide, with Netflix on prime with greater than 220 million subscribers.

Representatives for Disney, Hulu and Netflix didn’t instantly return requests for remark.

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