DALLAS, Texas (KAMR/KCIT) — The city of Amarillo, along with 24 other cities across the state of Texas, are expected to sue three major streaming entertainment platforms, alleging the platforms have failed to pay municipal franchise fees as far back as 2007.
According to a news release from the city of Nacogdoches, Amarillo, as well as cities including Abilene, Dallas, Fort Worth, Tyler and Waco, are expected to sue Disney, Hulu and Netflix, over allegations that the entities failed to pay the municipal franchise fees laid out in the Texas Public Utility Regulatory Act, an act which cities use to fund basic city services.
According to the news release, a video service provider is required to pay a Texas Municipality a 5% franchise fee if a video service’s programing is delivered via “wireline facilities located at least in part the public right of way.” Officials said this includes utility poles over the streets, along sidewalks or beneath roads.
“Disney, Hulu and Netflix have long withheld statutorily required payments to cities throughout Texas, depriving them of fees that help fund essential city services,” said Steven Wolens, a member of McKool Smith who is co-counsel on the lawsuit with Ashcroft Sutton Reyes and Korein Tillery. “This case was filed on behalf of our municipal clients to ensure future compliance with PURA and recoup significant fees owed by some of the nation’s largest streaming services.”
The lawsuit, which is expected to be filed in Dallas County, has not been filed as of this story’s publication. The city of Amarillo said they cannot comment on pending litigation. MyHighPlains.com has reached out to Disney, Hulu and Netflix for comment and have not heard back as of this story’s publication.