On Wednesday, the City of East St. Louis, Ill. filed a class action complaint claiming that streaming platforms failed to pay it and other municipalities 5% of their gross revenues as required by state law. The complaint seeks declaratory judgment, damages, other relief against Netflix Inc., Disney Streaming Services LLC, Apple Inc., Hulu LLC, Home Box Office Inc., Amazon.com Services LLC, CBS Entertainment LLC, YouTube Inc., CuriosityStream Inc., Peacock TV LLC, DirecTV Corporation, and Dish Network Service LLC.
The Southern District of Illinois filing explained that for more than a decade, the Cable and Video Competition Law of 2007 has mandated that video service providers affirmatively apply for and receive a video service authorization from the Illinois Commerce Commission and pay provider fees to Illinois cities, villages, incorporated towns, and counties. The defendants, the city contended, are subject to this obligation because they transmit their programming through wireline facilities located at least partly on public rights-of-way within Illinois municipalities.
Specifically, the filing explained, the streaming platform defendants store their video content either within or directly connected to local internet service providers’ network facilities. From the other side, when a subscriber wants to watch the defendants’ video programming, they use an internet-connected device to send a request to their local provider, who forwards that request to the defendants’ dedicated internet servers. The servers’ response is supposedly relayed back to the subscriber’s device, and the video programming is delivered via internet protocol technology.
However, instead of complying with the state law, the defendants have reportedly evaded their obligations because they failed to receive authorization from the state authority. They have also failed to pay the applicable service fees, calculated as up to 5% percent of gross revenue, “as derived from their providing video service in each unit.”
Because the services they provide fall within the ambit of the law, and the defendants can plead no exemption, they are subject to legal liability, the city contended. The plaintiff, individually and on behalf of other Illinois municipalities and counties, seeks to require the defendants to abide by the Cable and Video Competition Law of 2007, and pay the fees they owe to these municipalities and counties.