Netflix, Hulu Escape California City Video Service Provider Fees

An LA judge ruled that the city of Lancaster doesn't have the right to sue streamers for fees.


Netflix and Hulu have won another court case against a local government trying to impose taxes on the streaming giants similar to the ones cable TV companies pay for using public infrastructure. According to The Hollywood Reporter, a Los Angeles County judge ruled Wednesday that the city of Lancester doesn't have the right to sue because Netflix and Hulu do not own or operate infrastructure on public property.

In her ruling, LA County Superior Court Judge Yvette M. Palazuelos wrote that there's "no language" in the statute that "authorizes a local entity to bring an action compelling a non-franchise holder to apply for a state franchise under [the Digital Infrastructure and Video Competition Act] or to comply with its requirements."

Netflix and Hulu have also already won similar legal arguments in Arkansas, Nevada, and Texas. According to the Associated Press, the streamers have been winning these cases and escaping taxes and video service fees on the strength of arguments similar to the one presented in Lancaster--that the streaming services don't use public infrastructure.

However, the streaming services have lost one ruling at the dismissal stage in Missouri, according to The Hollywood Reporter.

These cases are likely to persist as local governments are feeling the effects of so many cutting the cord on cable--and as cable itself becomes an increasingly distant, or at least less appealing, memory. The Ohio Supreme Court considered a similar case this week, and the Tennessee Supreme Court is set to hear similar arguments in May.

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