Cities sue Netflix, Hulu, Disney+, claim they owe cable “franchise fees”

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Four cities in Indiana are suing Netflix and other video companies, claiming that online video providers and satellite-TV operators should have to pay the same franchise fees that cable companies pay for using local rights of way.

The lawsuit was filed against Netflix, Disney, Hulu, DirecTV, and Dish Network on August 4 in Indiana Commercial Court in Marion County. The cities of Indianapolis, Evansville, Valparaiso, and Fishers want the companies to pay the cable-franchise fees established in Indiana's Video Service Franchises (VSF) Act, which requires payments of 5 percent of gross revenue in each city.

The lawsuit is based on an unusual legal argument and doesn't seem likely to succeed. Essentially, the cities are claiming that Netflix and similar providers use the public rights of way simply by offering video streaming services over the Internet:

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