Cities Try To Impose Cable Fees on Netflix, Streaming Platforms
Cities are trying to force streaming service companies to pay cable operator fees.

COLUMBUS, Ohio â 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.
At issue in Ohio is the stateâs 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.
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.
In related lawsuits brought in Arkansas, California, Nevada, and Texas, Netflix and Hulu won their arguments last year that they canât 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, itâs up to the Commerce Department to label them a video service provider, a process they say canât be done through a lawsuit.
The state is siding with the streaming companies, contending that Ohioâs law only covers companies building infrastructure to carry cables.
âThis is about those who dig, they must pay,â the Ohio deputy solicitor general, Mathura Sridharan, told justices on the state Supreme Court during oral arguments Wednesday. âIf they donât dig, then they donât pay.â
A court decision isnât 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 âcould not deliver their video programming to their subscribers,â an attorney representing Maple Heights, Justin Hawal, said in a December court filing.
The âmodest 5 percent video service feeâ is not burdensome but instead represents a small return on billions of dollars in benefits that the streaming services receive nationwide from network infrastructure, Mr. Hawal said.
Justices seemed skeptical of Maple Heightsâ arguments, in particular questioning whether the argument was even one for the court to decide.
âShouldnât you be up at the Statehouse a block and a half away instead of at a courthouse trying to get the law changed?â Justice Pat Fisher asked Mr. Hawal Wednesday.
Mr. Hawal said Maple Heights is trying to apply existing law to a new technology.
Attorneys for Netflix say the company doesnât have physical wires and cables and doesnât need them under its internet streaming business model.
Unlike broadcast TV stations, âusers can watch content anywhere, anytime, and in any amount, so long as they have an internet connection,â an attorney representing Netflix, Amanda Martinsek, said in a November filing.
Netflix argues a growing number of courts nationally have reached the conclusion that companies like Netflix and Hulu donât owe provider fees because theyâre not video service providers.