A small, Cleveland suburb, Maple Heights, has filed a lawsuit against Netflix and Hulu, trying to force the streaming companies to pay a franchise fee typically applied to cable providers. The lawsuit is part of a growing national trend of cities in at least 13 states, often pinched by shrinking budgets, targeting the nascent streaming industry for new tax revenues. The city’s suit is filed under a state law written and passed in 2007 — when Netflix was mostly mailing its customers DVDs and Hulu had yet to launch.
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.
