SAN ANGELO, Texas (Update: September 22, 2022, 9:11 a.m.) — The San Angelo City Council, in a unanimous vote, approved a resolution to sue three major streaming services for more than $1 million and additional annual franchise fees.
During the city council meeting on Thursday morning, September 22, 2022, council members voted unanimously to sue Netflix, Hulu and Disney for an estimated $1.2 million in franchise fees. The suit also seeks to enforce the payment of annual franchise fees of up to $245,000.
(September 22, 2022, 7:47 a.m.) — The San Angelo City Council is scheduled to vote on whether to sue Netflix and other streaming services during the city council meeting on Thursday morning, September 22, 2022.
According to the meeting agenda, council members will decide on a resolution to contract three law firms — Dallas-based McKool Smith, Austin-based PC Ashcroft Sutton Reyes, LLC and St. Louis-based Korein Tillery, LLC — to represent the City in a lawsuit against three major streaming services for more than $1 million in municipal franchise fees.
If the resolution passes, San Angelo will join at least 25 other cities in Texas to sue streaming giants like Disney, Hulu, and Netflix for annual franchise fees required by the Texas Public Utility Regulatory Act. According to the law, a video service provider must pay Texas municipalities a five percent fee for services delivered “via wireline facilities located at least in part in the public right of way, such as utility poles over the streets or sidewalks or beneath the roads.”
These annual franchise fees are paid by cable providers and are commonly used to fund municipal services. According to reporting by the Texas Tribune, as people have dropped cable subscriptions for streaming services, cities have lost that revenue.
A spokesperson for the City says San Angelo could win up to $1.2 million in damages and could force the streaming services to pay annual franchise fees of up to $245,000. The three firms representing the City stand to gain up to 33 percent of the gross damages, along with additional legal fees, if the suit is successful.
The council is expected to vote on the resolution shortly after the city council meeting begins at 8:30 a.m. Concho Valley Homepage will update this story after the councilmember’s votes are cast.