Streaming Giants Owe ‘Franchise Fees’ to Georgia Cities and Counties, Lawsuit Says

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Netflix, Hulu, Disney, DirecTV and Dish Network face a lawsuit that alleges they owe unpaid franchise fees to Georgia cities and counties under the state’s Consumer Choice for Television Act.

The lawsuit, filed by Gwinnett County, the City of Brookhaven and the Unified Government of Athens-Clarke County, alleges the video service provider defendants are required by law to pay franchise fees to Georgia cities and counties yet have not done so, depriving the locales of “much-needed revenue.” 

The complaint echoes a lawsuit filed on August 11, 2020 against Netflix and Hulu by the City of New Boston, Texas, who similarly alleged the streaming giants owed fees to municipalities in the Lone Star State. 

According to the lawsuit, Georgia’s Television Act defines a “video service” as “the provision of programming through wireline facilities located at least in part in the public rights of way without regard to delivery technology, including Internet protocol technology.” Per the suit, the lawsuit requires an entity or person who offers video service in Georgia to pay a quarterly franchise fee to “each affected local governing authority” within which the entity or person provides the service. 

Despite the increasing number of Georgians who in recent years have obtained some or all of their video service from the defendants, the companies have not paid franchise fees within the state, the complaint alleges. The defendants, who the suit stresses transmit their programing through wireline facilities located at least in part in Georgia’s public rights-of-way, do not qualify as exceptions to the state’s Television Act given they are neither commercial mobile service providers nor internet service providers, the lawsuit contends.

“Despite profiting from paid video programming provided to their numerous subscribers in Gwinnett and in other class member cities and counties, none of the Defendants have ever paid the required franchise fees to any class members,” the case says. 

The lawsuit, initially filed on November 23, 2020 in Gwinnett County Superior Court, was removed to Georgia federal court in Atlanta on January 4, 2021. 

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