MAPLE HEIGHTS, Ohio (WJW) – The city of Maple Heights has filed a class action lawsuit against Netflix and Hulu in federal court that could impact every city and township across the state of Ohio.
The lawsuit accuses the live streaming companies of violating the Ohio Revised Code by not paying franchise fees.
According to the lawsuit, Netflix and Hulu transmit their programming over the same “broadband wireline facilities” located at least in part in the “public rights-of-way” as traditional cable companies.
However, unlike traditional cable companies, Netflix and Hulu have not been paying cities like Maple Heights the “video provider fee” and basically have been getting a free ride.
“So, they’re deriving a really big benefit,” said Attorney Justin Hawal, with DiCello, Levitt & Gutzler. “Without this infrastructure, they can’t provide their services and so we think they should pay their fair share of the franchise fees.”
Hawal filed the lawsuit on behalf of Maple Heights. He says Netflix and Hulu should be paying each municipality where they operate “up to 5% of their gross revenue” as derived from those cities.
“There is a statute in the state of Ohio that requires entities that provide video programming over wires and cables located in the public rights-of-way to pay franchise fees to municipalities and townships,” said Hawal. “We believe that they should be required to pay the same fees. That it’s only fair.”
It’ll be up to the Ohio Supreme Court to determine if the state statute cited in the lawsuit (Ohio Revised Code 1332.32) applies to live streaming companies and the case can go forward.
A hearing is scheduled for 9 a.m. April 13.
FOX 8 reached out but has not received comment from either Netflix or Hulu concerning the case.