Tyler, Nacogdoches among Texas cities suing Netflix, Hulu, Disney Plus

Cities are suing over unpaid fees going back several years
A lawsuit filed by 25 Texas cities claims that Disney, Hulu and Netflix have for years stiffed the cities out of fees required by state law.
Published: Aug. 8, 2022 at 6:55 PM CDT|Updated: Aug. 8, 2022 at 7:54 PM CDT

DALLAS, Texas (KLTV) - Two East Texas cities are suing streaming giants Netflix, Hulu, and Disney Plus.

Tyler and Nacogdoches are among 25 Texas cities suing the platforms over unpaid fees going back several years.

“The purpose of this lawsuit is to make sure that every everybody that uses our right of ways is paying their fair share,” Steven Kirkland, Nacogdoches City Attorney.

The oldest town in Texas has joined the Rose City in a lawsuit that also includes major Texas cities like Dallas, Fort Worth, Houston, and Austin. They’re suing the streaming platforms over fees they say should be paid in exchange for the use of right-of-way belonging to the city.

“The cable companies, the power companies, and all the other private entities that are operating facilities in the right of way actually pay a franchise fee to the city,” Kirkland said.

As more and more people end their cable subscriptions in favor of streaming options, cities are missing out on revenue.

“The cable franchise fee is 5%,” said Keidric Trimble, Chief Financial Officer for the City of Tyler. “We believe that these these companies are using the cable network and fiber network to stream these services. And those lines are located in a right of way that the city maintains and upkeeps so we expect a 5% franchise fee.”

It’s unclear exactly how much the platforms could owe the cities but Kirkland has a guestimate.

“We don’t have list of subscribers to know how many people they have,” he said. “But we’re guessing it could be anywhere from $50,000 to $100,000 a year.”

The cities hope to recover losses dating back to the start of each platform, with Netflix’s 2007 launch being the oldest.

“It is a problem that has to be solved,” said Kirkland.

The streaming platforms have not responded to a request for comment.

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