Cities sue Netflix, Hulu, Disney+, claim they owe cable “franchise fees”

Cities sue Netflix, Hulu, Disney+, claim they owe cable “franchise fees”
arstechnica.com

Listen, I get it. They want some compensation from Netflix, Hulu and Disney+ eating up all their local bandwidth. But that's where the money was.

They need to skate where the money is going, not where it was. The money was in broadcast TV and cable. And most of it is still there. But it's rapidly being sucked away by individual creators.

And at some point advertisers are going to wake up and realize the premium that broadcast and cable operators are charging per 1000 viewers is not really worth that much more than what YouTube pays Jake Paul.

The cable tv operators care about their municipal franchise agreements and aerial pole+underground right of way very much, since it gives them an incumbent ISP operating position over a large geographical area.

I should note that cable TV operators in a given city might have many different types of last mile architecture. Some of which can be taxed by the city, and some of which cannot. There's cable TV operators with their wholly-owned wood utility poles installed in the ROW (right of way), there's operators where they occupy a strand on a municipal electrical grid operator's poles, there's operators which are on poles shared 3-way between electrical grid operator, local telco, and cable TV. In newer housing developments some might occupy their own fully underground ducts between handholes and manholes with the ducts in the ROW. Or the ducts might be in land owned by HOAs. It depends very much on the history of how the analog cable TV system in a city got built out in the 1970s and 1980s and other factors.

In places that are unfortunate enough to lack real competition between the cable TV operator and the local phone company for last-mile, it can give an operator a near monopoly advantage. For instance you might be able to get 200 Mbps downstream service from Comcast while the local phone company can only offer 10Mbps ADSL2+.

Some smart people at the local phone company probably have your area on a map targeted for a single-strand to the home GPON FTTH overbuild, but accomplishing that in the near future is either limited by budget concerns or lack of manpower/bucket truck, lineman and splicer crews to accomplish it.

On the part of the city that might be bringing in 450,000 dollars a year in cable TV franchise tax revenue, it's such a short sighted move. Yes, maybe your cable TV franchise tax will continue to drop, as more people disconnect cable tv (taxed) and move to pure internet services (not taxed).

But the economic benefit to a city of having multiple, overlapping competing gigabit-class services to the end user is greater than the tax revenue. For instance the parts of Seattle right now where you can work from home and have your choice of centurylink (telco ILEC) GPON 1Gbps FTTH, or 1Gbps DOCSIS3.1 or GPON from Wave or Comcast.