Cable television

Lawsuit argues streaming services are subject to cable TV law

CAMDEN — A South Jersey seaside town wants to play a starring role in a Netflix courtroom drama.

But high-end Longport doesn’t see itself as the setting for 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 television law — and, therefore, must pay a portion of their revenue to municipalities.

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Longport and Irvington, Essex County, are named as plaintiffs in the lawsuit, filed Friday in federal court in Camden. But they seek to represent hundreds of cities across the state — basically, anywhere residents stream Netflix and Hulu programming.

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 its quarterly results on Thursday following a recent backlash from customers following a 60% increase in fees.  (Photo by Justin Sullivan/Getty Images)

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

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

So streaming services would also have to pay “a franchise fee equal to a percentage of their gross revenue, drawn in each municipality,” the lawsuit says.

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

Companies that fall under the Cable TV Act must pay fees to municipalities equal to 2-3.5% of their gross revenue in those cities, the lawsuit says.

It describes the gross revenue as “recurring charges in the nature of subscription fees”.

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

He’s asking a judge to find that the companies must abide by cable TV law and must pay franchise fees to municipalities across the state.

Longport and Irvington are very different communities located approximately 120 miles apart on opposite ends of New Jersey.

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

It indicates that 91% of the inhabitants of the district have a broadband Internet subscription.

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

About 75% of its inhabitants have high-speed Internet subscriptions.

James Cecchi, a Roseland attorney who filed the lawsuit, was also unavailable 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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