Cleveland Suburb Accuses Netflix, Hulu of Flouting Ohio Utilities Law

Netflix and Hulu are defying Ohio law by running their streaming services through “wireline facilities located at least in part in the public right-of-way,” without proper state authorization and payment of 5% quarterly “video service provider” fees to local municipalities, alleged Maple Heights, Ohio, in a complaint (in Pacer) Friday in U.S. District Court in Cleveland. Their failure to seek authorization from the Ohio commerce director and give localities 10 days’ advance written notice before activating their streaming services doesn't relieve them of the obligation to pay the franchise fees, said the complaint, seeking class-action status on behalf of other Ohio municipalities. The suburb is about 10 miles southeast of downtown Cleveland. Its lawsuit seeks back payment of the unpaid fees with interest, plus declaratory judgment that Netflix and Hulu are violating state law. The same team of lawyers filed a nearly identical complaint Aug. 11 in Texarkana for New Boston, Texas, seeking class-action status for all Texas municipalities (see 2008120001). Netflix and Hulu didn’t comment Monday.