Ohio court rejects city cable fees for streaming services

COLUMBUS, Ohio (AP) — The streaming companies Netflix and Hulu are usually not video service suppliers that must pay native governments in Ohio the identical charges levied on cable operators, the state Supreme Court docket dominated Wednesday in a case much like lawsuits filed by a whole bunch of different municipalities nationally.

At difficulty in Ohio is the state’s 2007 Video Service Authorization legislation, which directed the state Commerce Division to find out what entities should receive permission to bodily set up cables and wires in a public right-of-way. Corporations which are deemed video service suppliers should pay a price to native governments below that legislation.

Officers with Maple Heights in suburban Cleveland contended that streaming companies are topic to the price as a result of their content material is delivered by way of the web over cables and wires.

The Supreme Court docket stated in its ruling that Netflix and Hulu aren’t video service suppliers below the legislation as a result of they supply streaming companies over public web.

“They don’t want to position their very own wires or gear within the public rights-of-way to offer their subscribers with their programming, and the gear used to entry their companies belongs to their clients, to not them,” the courtroom famous.

Messages looking for touch upon the choice had been left Wednesday for the businesses and for attorneys representing Maple Heights.

The argument earlier than the Ohio courtroom was much like these in a number of different states the place cities are attempting to drive streaming service firms to pay cable operator charges.

In Tennessee, the state Supreme Court docket final spring heard arguments introduced by Knoxville towards Netflix and Hulu. In July, a Missouri decide allowed greater than 400 municipalities to hitch efforts in a lawsuit looking for comparable charges towards Netflix and Hulu. In 2020, 4 Indiana cities sued Netflix, Disney, Hulu, DirectTV and Dish Community to require them to pay the identical franchise charges to native governments that cable firms should pay.

In associated lawsuits introduced in Arkansas, California, Nevada and Texas, Netflix and Hulu received their arguments final yr that they will’t be handled the identical as video suppliers. In September, a federal Justice of the Peace decide tossed a lawsuit by East St. Louis looking for charges from Netflix, Disney, Apple, Hulu and eight different streaming companies, ruling that the state legislation didn’t apply.

Streaming firms argue their distribution methodology is completely different from conventional video suppliers. In addition they stated that within the Ohio case, it’s as much as the Commerce Division to label them a video service supplier, a course of they are saying can’t be performed by way of a lawsuit. The courtroom agreed.

Attorneys for Maple Heights argued that nothing within the 2007 legislation requires a video service supplier to personal or bodily entry wireline services in public rights-of-way to be topic to video service supplier charges.

With out that gear, the attorneys for the town argued, streaming companies couldn’t ship their programming. The town contended the “modest 5% video service price” isn’t burdensome however as a substitute represents a small return on billions of {dollars} in advantages that the streaming companies obtain nationwide from community infrastructure.

Netflix argued {that a} rising variety of courts nationally have concluded that streaming companies don’t owe supplier charges as a result of they’re not video service suppliers.

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Welsh-Huggins, a longtime reporter on the Related Press, retired this month.

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