Missouri Streaming Franchise Fee Bill Sees Municipal Opposition

Municipal interests pushed back on a bill before the Missouri Senate Tuesday clarifying that streaming content is exempted from paying video franchise fees. In a Senate Commerce, Consumer Protection, Energy and the Environment Committee hearing on SB-947, Missouri Municipal League lobbyist Shanon Hawk of Armstrong Teasdale said municipalities started working with the Senate about eight years ago on updates to the state's public right-of-way rules, and streaming was part of that much larger conversation. She said subsequent updates included a promise that there would be a state task force on the future of right-of-way taxation, but that task force authorization expired in 2023 without ever meeting. Confusion remains about who must get a state franchise as a video service provider and municipalities are still trying to get right-of-way updates. ROWs are a financial liability for municipalities, as they carry maintenance and upkeep costs, said Pat Kelly, Municipal League of Metro St. Louis executive director. If streaming services don't pay using infrastructure in the ROW, taxpayers must, he said. Republican sponsor of the bill, Holly Thompson Rehder, said she had pushed for similar legislation when she worked as head of government relations for Galaxy Cablevision. She said streaming services weren't being considered when the state's Video Services Providers Act was passed, and that legislation never intended for streamers to be included under its franchise-fee obligations. She said franchise fees are intended to pay for actual access to rights of way. Levying a franchise fee on streamers is akin to levying such a fee on a cable provider's premium channels like HBO, she said. Representatives of Dish Network, DirecTV and Netflix all briefly testified in favor of the legislation. Backers of the bill repeatedly referred to franchise fees on streaming series as a tax that would be borne by those streamers' subscribers. Rehder said fee increases ultimately get passed to subscribers, and the clarification would prevent "our constituents from getting a tax increase, because that's exactly what this would be for them." The Municipal League's Kelly disputed that, calling it a fee. Similar legislation, HB-2057, has been introduced in the Missouri House.