Recently, the city of East St. Louis tried to force Netflix, Apple, Dinsey, and more to pay taxes as if they were cable TV companies. The city wanted to put a 5% franchise fee on streaming video to city residents. Now U.S. Judge Mark A. Beatty has ruled that they can not put a tax on streaming as like cable TV companies that run physical lines through the city.
The city named Netflix, Disney, Apple, Hulu, Amazon, WarnerMedia, YouTube, Peacock TV, DIRECTV, DISH Network, CuriosityStream, and CBS Interactive. If the city had won, it would have allowed the city to tax all streaming video services like cable TV.
According to the Judge, in this case, the streaming services are not cable TV companies. The Judge, in his ruling, decided that internet service is not cable TV. Unlike cable TV, that is a closed circuit system that offers TV through cable, the internet is as open as a circuit gets, according to the judge. Even though some cable TV companies also offer internet services, that does not mean that the internet is a cable TV system that can be taxed under laws clearly meant for cable TV systems.
In short, the judge says that the City of East St. Louis can not force streaming services like Netflix, YouTube, and more. The Judge made it clear that, unlike cable TV companies, streaming do not use the city’s right of ways to run cables they have no physical presence in the city. So the city can not tax them like cable TV companies who use the city’s right of ways to run cables.
This is a huge win for streaming services to help them keep their costs down. This also sets a precedent to help fight other cities that are trying to do the same thing. For now, cable TV customers will have to continue to pay taxes that streaming services do not.