Ought to Netflix and different streaming providers need to pay native governments the identical charges levied on cable operators?
That was the query earlier than the Ohio Supreme Courtroom throughout a Wednesday listening to, because the court docket debates whether or not streaming providers reminiscent of Netflix and Hulu are lined by a state legislation that may require them to pay to play.
The argument is just like one in a number of different states, the place cities try to pressure streaming service firms to pay cable operator charges.
At situation in Ohio is the state’s 2007 Video Service Authorization legislation, which directed the state Commerce Division to find out what entities should acquire permission to bodily set up cables and wires in a public right-of-way. Corporations deemed video service suppliers should pay a charge to native governments underneath that legislation.
Officers with Maple Heights in suburban Cleveland contend that streaming providers are topic to the charge as a result of their content material is delivered through the web over cables and wires.
In Tennessee, the state Supreme Courtroom is scheduled to listen to arguments subsequent month introduced by Knoxville towards Netflix and Hulu. An analogous case introduced by town of Creve Coeur is pending in Missouri. In 2020, 4 Indiana cities sued Netflix, Disney, Hulu, DirectTV and Dish Community to require them to pay the identical franchise charges to native governments that cable firms should pay.
In associated lawsuits introduced in Arkansas, California, Nevada and Texas, Netflix and Hulu gained their arguments final yr that they’ll’t be handled the identical as video suppliers.
Streaming firms argue their distribution methodology is totally different from conventional video suppliers. Additionally they say within the Ohio case, it’s as much as the Commerce Division to label them a video service supplier, a course of they are saying can’t be accomplished via a lawsuit.
The state is siding with the streaming firms, contending that Ohio’s legislation solely covers firms constructing infrastructure to hold cables.
“That is about those that dig, they need to pay,” Mathura Sridharan, the Ohio deputy solicitor common, instructed justices on the state Supreme Courtroom throughout oral arguments Wednesday. “In the event that they don’t dig, then they don’t pay.”
A court docket resolution isn’t anticipated for months.
Attorneys for Maple Heights argue that nothing within the 2007 legislation requires a video service supplier to personal or bodily entry wireline amenities in public rights-of-way to be topic to video service supplier charges.
With out that tools, streaming providers “couldn’t ship their video programming to their subscribers,” Justin Hawal, an legal professional representing Maple Heights, mentioned in a December court docket submitting.
The “modest 5 p.c video service charge” just isn’t burdensome however as a substitute represents a small return on billions of {dollars} in advantages that the streaming providers obtain nationwide from community infrastructure, Hawal mentioned.
Justices appeared sceptical of Maple Heights’ arguments, specifically questioning whether or not the argument was even one for the court docket to determine.
“Shouldn’t you be up on the Statehouse a block and a half away as a substitute of at a courthouse attempting to get the legislation modified?” Justice Pat Fisher requested Hawal Wednesday.
Hawal mentioned Maple Heights is attempting to use current legislation to a brand new know-how.
Attorneys for Netflix say the corporate doesn’t have bodily wires and cables and doesn’t want them underneath its web streaming enterprise mannequin.
In contrast to broadcast TV stations, “customers can watch content material wherever, anytime, and in any quantity, as long as they’ve an web connection,” Amanda Martinsek, an legal professional representing Netflix, mentioned in a November submitting.
Netflix argues a rising variety of courts nationally have reached the conclusion that firms like Netflix and Hulu don’t owe supplier charges as a result of they’re not video service suppliers.
