Cable television

Lawsuit argues streaming services are subject to cable TV law

CAMDEN – A seaside town in southern Jersey wants to star in Netflix courtroom drama.

But the top-of-the-line Longport doesn’t see itself as part of a movie on the streaming service.

Instead, it’s one of two New Jersey cities to sue Netflix and fellow streamer Hulu.

The proposed class action lawsuit argues that the entertainment giants fall under the provisions of the state’s cable TV law – and, therefore, must pay part of their revenues to municipalities.

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Longport and Irvington, in Essex County, are named plaintiffs in the lawsuit, filed Friday in federal court in Camden. But they seek to represent hundreds of cities across the state – essentially, wherever residents stream Netflix and Hulu programs.

LOS GATOS, CA - JULY 20: A sign is displayed outside the Netflix headquarters on July 20, 2011 in Los Gatos, California.  Online movie rental company Netflix will release quarterly results on Thursday following a recent backlash from customers over a 60% fee hike.  (Photo by Justin Sullivan / Getty Images)

The lawsuit argues that the streaming services reached customers through “wireline facilities” that are “located at least in part in public rights-of-way.”

And he says their programs “are comparable to those provided by traditional cable companies and television stations.”

Thus, streaming services should also pay “franchise fees equivalent to a percentage of their gross revenues, from each municipality,” says the lawsuit.

Representatives for Netflix and Hulu could not be reached for immediate comment.

Companies that fall under the cable television law must pay a fee to municipalities equivalent to 2 to 3.5 percent of their gross revenues in those cities, the lawsuit said.

He describes gross revenues as “recurring charges in the nature of subscription charges”.

The lawsuit contends that Netflix and Hulu currently provide cable television service in New Jersey “without authorization”.

He’s asking a judge to rule that companies must obey cable TV law – and must pay franchise fees to municipalities across the state.

Longport and Irvington are very different communities located about 120 miles from each other on opposite ends of New Jersey.

Longport, a seaside town in Atlantic County, has less than 1,000 residents with a median income of $ 116,500, according to the US Census Bureau.

It indicates that 91 percent of the borough’s residents have a broadband Internet subscription.

Irvington, on the other hand, has about 54,000 residents and a median household income of $ 45,176.

About 75 percent of its residents have broadband Internet subscriptions.

James Cecchi, a Roseland lawyer who filed the complaint, was also not available for comment.

Jim Walsh covers public safety, economic development, and other topics for the Courier-Post, the Burlington County Times, and the Daily Journal.

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