A Texas city filed a federal class action suit against Netflix and Hulu, stating the streaming services should be paying it a franchise fee-- 5 percent of the gross income generated in the community.
The city of New Boston claims Netflix and Hulu are video service providers and should have applied to be certified by the Public Utility Commission of Texas. New Boston contended that its residents get shows streamed via internet service providers that use locally based servers. In New Boston's view, that local connection requires the companies, certified or not, to pay quarterly franchise fees to any municipality they reach in the state.
The lawsuit, filed Tuesday in U.S. District Court, names "All Texas municipalities in which one or more of the Defendants has provided video service" as part of the class. It asks that the court declare Netflix and Hulu video service providers as defined under the Texas utilities code, and thus required to file for certification and pay the franchise fee, attorney's fees and interest.
As of yet, neither Netflix or Hulu have issued a response. In a similar lawsuit in Missouri, Netflix asserted in 2018 it is not a video service provider. That case is pending.
(via The Hollywood Reporter)