Netflix, Inc. and Hulu, LLC offer online streaming services. To do this, they make use of broadband wireline facilities, which the complaint for this class action claims are “located at least in part in public rights-of-way” in the state of New Jersey. The complaint alleges that the companies should thus be paying franchise and fee obligations, based on New Jersey’s Cable Television Act (CTA).
The class for this action is all New Jersey municipalities in which Netflix or Hulu has provided video service.
Netflix established it streaming service in 2007. It claims, “Since this launch, we have developed an ecosystem for [I]nternet-connected screens and have added increasing amounts of content that enable consumers to enjoy entertainment directly on their [I]nternet-connected screens.”
Hulu is described this way in a Walt Disney Company First Quarter Earnings Report for 2021: “Hulu aggregates acquired and original television and film entertainment content for distribution to [i]nternet-connected devices. … In addition, Hulu operates a digital OTT MVPD service, which offers linear streams of broadcast and cable channels, including the major broadcast networks.” Hulu has more than 39 million subscribers.
The complaint claims that the offerings of Netflix and Hulu include television shows, movies, and other programming, delivered to subscribers. According to the complaint, the companies are providers of “video programming” and “cable television service” and are therefore subject to the NJ CTA.
To demonstrate this, the complaint provides definitions in the Act of “cable television service” and “video programming.” The complaint claims, “The CTA further notes that ‘cable television service’ includes ‘video programming, without regard to the technology used to deliver such video programming, including Internet protocol technology…’”
The complaint alleges that Netflix and Hulu “subscribers typically use a broadband Internet connection such as DSL or fiber optic cable to receive … programming.” It claims that providers include companies such as Comcast and Verizon that rely on wireline facilities in public rights-of-way. Netflix and Hulu should have applied for certificates of approval or franchises to use such facilities, the complaint claims, but even if they did not do so, they are still required to pay the fees due to the municipalities.
The plaintiffs in this case are two New Jersey municipalities, the Borough or Longport and Township of Irvington. The complaint claims that both Netflix and Hulu must pay franchise fees to these communities. The fees are calculated as a percentage of the companies’ gross revenues coming from each municipality. Up to now, the companies have not been paying these fees.
Article Type: LawsuitTopic: Permits and Authorizations and So On
Most Recent Case Event
Netflix and Hulu Franchise Fees to New Jersey Municipalities Complaint
August 13, 2021
Netflix, Inc. and Hulu, LLC offer online streaming services. To do this, they make use of broadband wireline facilities, which the complaint for this class action claims are “located at least in part in public rights-of-way” in the state of New Jersey. The complaint alleges that the companies should thus be paying franchise and fee obligations, based on New Jersey’s Cable Television Act (CTA).
Netflix and Hulu Franchise Fees to New Jersey Municipalities ComplaintCase Event History
Netflix and Hulu Franchise Fees to New Jersey Municipalities Complaint
August 13, 2021
Netflix, Inc. and Hulu, LLC offer online streaming services. To do this, they make use of broadband wireline facilities, which the complaint for this class action claims are “located at least in part in public rights-of-way” in the state of New Jersey. The complaint alleges that the companies should thus be paying franchise and fee obligations, based on New Jersey’s Cable Television Act (CTA).
Netflix and Hulu Franchise Fees to New Jersey Municipalities Complaint