New Boston, Texas Small Town (and other cities) Suing Netflix, Hulu and Others Over Local Utility Fees

Unsuccessful lawsuits are filed all the time.

No idea if this will be one or not, but apparently a small Texas town called New Boston wants 5% of the revenue generated from subscribers living in their town because Netflix and Hulu use internet routed through their area.

A small town in Texas is going up against streaming giants Netflix and Hulu with a class-action lawsuit over utility fees. New Boston, Texas says the streamers use broadband infrastructure to reach their residents, and should in turn pay the town 5% of the revenue generated from those residents as a fee.

Netflix and Hulu are Being Sued by a Texas Town Saying it Should be Getting 5% | Cord Cutters News

As if local utility fees aren’t onerous enough in some areas, this one seems a bit of a stretch to me, but 5% of subscriber revenue for only those who live in the town probably is a very small amount of dollars for Netflix and Hulu. I doubt, just because they don’t want to set some kind of legal precedent that they will settle.

This just in: 4 towns in Indiana are suing, too.

The Northwest Indiana Times reported the class-action lawsuit filed this month argues that Netflix, Disney, Hulu, DirectTV and Dish Network must pay a 5% franchise fee of gross revenue to the localities where their customers resid

4 Indiana cities sue streaming services including Netflix and Hulu over franchise fees

This class action lawsuit could be a dam-breaking scenario that rises the cost of all the major streaming channels. It feels a bit like the car tabs in our state that used to be inexpensive and now cost hundreds of dollars, loaded with taxes and fees. I don’t know about others, but don’t want my streaming channel bills to look like this:

$5.99 base cost
$0.30 local utility (5%)
$0.60 county ___ fee (10%)
$1.20 state ___ fee (20%)
$0.60 sales tax
———————
= $8.69 actual monthly cost after taxes and fees

This is the kind of BS that drives up cable and satellite bills. If companies have to pay these taxes, then they should be included in their base cost and not be passing them along to consumers on top of their monthly fees, with the lone exception of sales tax. Then again, sales taxes are often toted as something that won’t be charged if there is a state income tax, and in some states there are both taxes.