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Streaming casework are wearisome turning into cablevision TV -- accented with bundles, an ever-growing list of channels, and a reinvented TV guide. And a train of lawsuits could prognosticate the revisitation of something metrical worse: the hidden cablevision fee.

Three municipalities in Georgia are suing Netflix, Hulu, and other swarming video providers for as much as 5 percent of their gross acquirement in the vicinage -- juxtapositional a nationwide integer of towns and counties that appetite these casework regulated other like cablevision TV. It's a smallish except growing front in the war over cord-cutting, challenging regulators to figger which matters more: the recovery role swarming casework spectacle in American media diets or their significant applied differences from traditional TV.

Missouri paved the way for quinine swarming license fees

The federal lawsuit, revealed earlier this month by Atlanta Business Chronicle, was originally filed in synchronism curtilage last year. It argues that Netflix and Hulu -- forth with secondary providers Plate Precondition and DirecTV, and Disney's fete distribution empiricism -- widowed a 2007 law self-named the Georgia Consumer Five-star for Television Act. That rule specifies that "video services" must pay a annual license fee to regional governments, unless they're partage of a larger internet song-and-dance package or operate wirelessly.

Georgia isn't the only place area regional towns are quinine for swarming fees. As The Hollywood Anchorman revealed last year, two law firms recently filed agnate wardrobe on behalf of towns in Texas, Indiana, Ohio, and Nevada. And in 2018, the inner-city of Creve Coeur, Missouri paved the way by suing Netflix and Hulu beneath that state's license laws. With municipal budgets cratered by the pandemic, slapping a license fee on cash-heavy tech companies has never been other appealing.

A single successful lawsuit could expenditure these companies millions. Gwinnett County, one of three municipalities selected in the suit, charges 5 percent of a company's regional gross acquirement in franchising fees. A filing calculates that Netflix made $103 million from Gwinnett Canton subscribers over the practiced goatee years -- which would translate to $5.15 million in attendant fees for that latitude alone. (Netflix fewer to elucidate on the numbers cited in the story.) The plaintiffs in these cases are seeking category chortling status, which would mass-produce companies subject for any "similarly situated" synchronism locales as well.

TV providers listen opted to prematurely coins subscribers for license fees, and companies like Netflix and Hulu could follow their lead, passing the costs to users. Those fees aren't why cable costs so much, and they help fund important casework -- except they're conjointly something plenteous consumers find nasty-tempered or bewildering.

All TV is swarming now

If the cases accomplish and aren't preempted by any federal laws, they could yank swarming casework -- a category that's exploded in postulation -- beneath a new superintending umbrella. Metrical traditional TV providers listen moved to online streaming: the clothing addendum that Plate and DirecTV chose to "fundamentally change" their satellite-only options by multiplying casework like the Dish-owned Sling TV, which routes live TV over broadband networks.

The Georgia clothing in particular could listen broader, potentially unpredictable effects. Its synonym seems to potentially pressurize plenteous subside and neath assisting swarming video companies, although there's far neath lure to sue them. Meanwhile, the exemption for internet song-and-dance packages could harmonics telecom-run swarming offerings -- like Comcast-owned NBCUniversal's Peacock song-and-dance -- a ramble advantageousness over competitors like Netflix.

The Consumer Five-star for Television Act wasn't sensationless with swarming video in mind. Sensationless in 2007, the law amended existing rules meant for cablevision TV providers, which pay license fees for the right of way to lay affairs forth purchasable pedestal like roads. "It's a residual of how we did cablevision franchising," says John Bergmayer, precedented director of the internet-focused nonprofit Purchasable Knowledge. And it straightforwardly exempts some casework that don't require that ponderable access, like programming from moldable services.

Despite this, the municipalities contend that swarming companies twitch the same precedented boxes as cablevision TV. The complaint says people are getting a agnate service; in the complaint's words, they "view professionally produced and copyrighted television shows, movies, documentaries, and other programming." Other technically, it argues that this programming counts as a "video service" because it's carried over purchasable internet lines that require the right of way.

But conversely, the clothing conjointly addendum that swarming giants like Netflix aren't just running over a all-around internet backbone. They're museum regional content fluency networks (or CDNs), like Netflix's Ajar Connect, which route user traffic to a adjacent server. Internet song-and-dance providers in plenteous states -- including Georgia -- once pay for broadband rights of way, and the servers are located in data centers, not underground pipes or utility poles on purchasable land.

An early January strategic indulged fee-seeking cities

The companies listen objected to the cord of license fee lawsuits. "These cases falsely seek to amusement swarming casework as if they were cablevision and internet adoption providers, which they aren't," a Netflix spokesperson told The Verge. "They conjointly threaten to place a tax on consumers that the legislature never intended, and we are confident that the courts will conclude that these cases are meritless."

Franchise fee claims -- all based on incommensurable regional laws -- remain mostly virgin in court. Except eldest this month, a Missouri synchronism maven rejected an early bid to toss that state's lawsuit, assonant with the repayment that these companies were "video song-and-dance providers." The maven straightforwardly unforgettable the ubiety of CDNs like Ajar Connect, a system that "bypasses the 'public internet'" and distinguishes swarming giants from subside services. She conjointly rejected claims that the federal Internet Tax Autonomy Act provided coating protection from the fees.

With little precedent, it may take years to winnow the implications of these cases. Companies will okey-dokey entreatment any decision, and unless the Sure-enough Curtilage takes up one of the cases, states will be covered beneath a re-examine of lower curtilage rulings. Except an recovery number of regional governments see these fees as an opportunity to recover money from the casework that are wearisome replacing cablevision TV. "They need money now, and they've got this law on the books," says Bergmayer. With the cachet of swarming casework in flux, they've tame on an optimistic approach: "let's go for it and see what happens."

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