INDIANAPOLIS — From your TV to the courtroom, a real life legal drama is about to play out between Netflix and four Indiana communities.
Indianapolis, Fishers, Evansville and Valparaiso are suing video streaming services including Netflix, Hulu, and Disney+ over franchise fees.
“Indiana has long had a law saying that all Indiana cities are owed franchise fees if companies deliver video programming through a public right-of-way,” said Andrew Hull, a lawyer for the City of Indianapolis. “Some companies, like cable companies, have been following this law and paying franchise fees for years. But some of their competitors, the defendants in this case, have been delivering video programming in the same way but have been ignoring the law by not paying the fees.”
The law allows municipalities to charge up to five percent of a cable company’s gross revenue.
According to NCTA, The Internet and Television Association, local governments collected $3.5 billion last year in regulatory and franchise fees. In Indianapolis, the 2021 budget includes an estimated $9 million in cable/satellite provider franchise fees.
“It's especially important now in the middle of this pandemic where several communities across Indiana are facing dire revenue challenges,” said Fishers City Attorney Chris Greisl.
Dom Caristi, professor of Telecommunications at Ball State University, said cities are seeing a decline in franchise fee revenue in general because of an FCC rule change that allows cable companies to include “in-kind contributions” as part of their five percent revenue.
“So if a local cable company is providing a studio for public access, they can count the value of that toward the five percent of revenue,” said Caristi.
13News reached out to Netflix, Hulu, and Disney for comment. So far, we haven’t heard back.
To see the complaint: