US States Ask Netflix, Hulu, More Streaming Services to Pay Cable Fees

The Ohio Supreme Court is debating whether streaming services are covered by a state law.

Advertisement
By Assosiated Press | Updated: 14 April 2022 17:55 IST
Highlights
  • Some officials contend that streaming services are subject to the fee
  • Netflix and Hulu won their arguments last year in select regions
  • Streaming firms argue their distribution method is different

Some cities are trying to force streaming service companies to pay cable operator fees

Should Netflix and other streaming services have to pay local governments the same fees levied on cable operators?

That was the question before the Ohio Supreme Court during a Wednesday hearing, as the court debates whether streaming services such as Netflix and Hulu are covered by a state law that would require them to pay to play.

The argument is similar to one in several other states, where cities are trying to force streaming service companies to pay cable operator fees.

Advertisement

At issue in Ohio is the state's 2007 Video Service Authorization law, which directed the state Commerce Department to determine what entities must obtain permission to physically install cables and wires in a public right-of-way. Companies deemed video service providers must pay a fee to local governments under that law.

Advertisement

Officials with Maple Heights in suburban Cleveland contend that streaming services are subject to the fee because their content is delivered via the internet over cables and wires.

In Tennessee, the state Supreme Court is scheduled to hear arguments next month brought by Knoxville against Netflix and Hulu. A similar case brought by the city of Creve Coeur is pending in Missouri. In 2020, four Indiana cities sued Netflix, Disney, Hulu, DirectTV and Dish Network to require them to pay the same franchise fees to local governments that cable companies must pay.

Advertisement

In related lawsuits brought in Arkansas, California, Nevada and Texas, Netflix and Hulu won their arguments last year that they can't be treated the same as video providers.

Streaming companies argue their distribution method is different from traditional video providers. They also say in the Ohio case, it's up to the Commerce Department to label them a video service provider, a process they say can't be done through a lawsuit.

Advertisement

The state is siding with the streaming companies, contending that Ohio's law only covers companies building infrastructure to carry cables.

“This is about those who dig, they must pay,” Mathura Sridharan, the Ohio deputy solicitor general, told justices on the state Supreme Court during oral arguments Wednesday. “If they don't dig, then they don't pay.”

A court decision isn't expected for months.

Attorneys for Maple Heights argue that nothing in the 2007 law requires a video service provider to own or physically access wireline facilities in public rights-of-way to be subject to video service provider fees.

Without that equipment, streaming services “could not deliver their video programming to their subscribers,” Justin Hawal, an attorney representing Maple Heights, said in a December court filing.

The “modest 5 percent video service fee” is not burdensome but instead represents a small return on billions of dollars in benefits that the streaming services receive nationwide from network infrastructure, Hawal said.

Justices seemed sceptical of Maple Heights' arguments, in particular questioning whether the argument was even one for the court to decide.

“Shouldn't you be up at the Statehouse a block and a half away instead of at a courthouse trying to get the law changed?” Justice Pat Fisher asked Hawal Wednesday.

Hawal said Maple Heights is trying to apply existing law to a new technology.

Attorneys for Netflix say the company doesn't have physical wires and cables and doesn't need them under its internet streaming business model.

Unlike broadcast TV stations, “users can watch content anywhere, anytime, and in any amount, so long as they have an internet connection,” Amanda Martinsek, an attorney representing Netflix, said in a November filing.

Netflix argues a growing number of courts nationally have reached the conclusion that companies like Netflix and Hulu don't owe provider fees because they're not video service providers.


Why are they still making more Harry Potter? We discuss this on Orbital, the Gadgets 360 podcast. Orbital is available on Spotify, Gaana, JioSaavn, Google Podcasts, Apple Podcasts, Amazon Music and wherever you get your podcasts.
Affiliate links may be automatically generated - see our ethics statement for details.
 

For the latest tech news and reviews, follow Gadgets 360 on X, Facebook, WhatsApp, Threads and Google News. For the latest videos on gadgets and tech, subscribe to our YouTube channel. If you want to know everything about top influencers, follow our in-house Who'sThat360 on Instagram and YouTube.

Further reading: Netflix, Hulu, Disney
Advertisement

Related Stories

Popular Mobile Brands
  1. Nothing Announces Offers on Phones, Wearables During Flipkart Sale
  2. Vivo Y31 Series With 6,500mAh Battery Launched in India: See Price
  3. Samsung Begins Rolling Out One UI 8 Update to the Galaxy S25 Series
  4. [Exclusive] Noise to Launch Flagship Master Series Over-Ear Headphones Soon
  5. Flipkart Big Billion Days Sale: Discounts on Motorola Phones Announced
  6. Best Mobiles Under Rs. 60,000 in India
  7. iOS 26 Released Alongside iPadOS 26, macOS Tahoe: Here's How to Download It
  8. Oppo Find X9 Launch Timeline Revealed: See Find X9 Pro Camera Samples
  9. iQOO 15 Live Image Leaked; Company Reveals Display Details
  10. Samsung Galaxy S25 FE With 50-Megapixel Camera Launched in India: See Price
  1. The Witcher Season 4 Release Date Revealed: Know When and Where to Watch It Online
  2. iOS 26 Update Released Alongside iPadOS 26 and macOS Tahoe: Check Eligible Models, How to Download
  3. Scientists Propose Space Missions to Chase Down Interstellar Comets
  4. Iceland Plume Discovery Reveals Ancient Volcanic Funnels Across North Atlantic
  5. Huawei Watch Ultimate 2 Design Renders Leaked, Could Launch Soon
  6. Marvel's Wolverine Will Reportedly Launch in 2026; Insomniac's Venom Game in 'Active Development'
  7. US President Donald Trump Challenges Block on Removing US Fed’s Lisa Cook
  8. iPhone 17 Series Outpaces iPhone 16 in Demand While iPhone 17 Pro Max Tops Pre-Orders, Analyst Says
  9. iPhone 16 Remained Top Selling Smartphone For Second Consecutive Quarter Globally: Report
  10. Samsung Galaxy S25 FE Launched in India With 6.7-Inch AMOLED Screen, 50-Megapixel Camera: Price, Features
Gadgets 360 is available in
Download Our Apps
Available in Hindi
© Copyright Red Pixels Ventures Limited 2025. All rights reserved.