Georgia Court Joined Contingent Rejecting Franchise Fees for Streaming Giants

Local governments continue to lose traction in the fight to get video streaming companies to pay local franchise fees. 

This past spring a Georgia Court of Appeals joined the mounting list of trial and appellate courts across the country that have rejected local governments’ demands for video service franchise fees from streaming service companies. These fees essentially function as a license to own and operate a business in a specified area. Although the efforts persist, little traction has been achieved in favor of local officials claims.

The Small Business Administration covers a number of details about why these fees matter and how they work. The recurring consensus, however, contends that these claims are missing a “right of action” for local governments under similar video service statutes or that the video service statutes do not apply to streaming companies in the first place. A handful of courts have rejected the local government franchise fee claims on both grounds.

The judge in Georgia dismissed the local case based on three major points contending that local governments:

  • lacked an express or implied right of action against the streaming companies
  • failed to allege that the streaming companies “construct[ed] or operat[ed] a network in the public rights of way” as required to trigger the obligation to pay franchise fees under the Television Act
  • could not circumvent their lack of a right of action through their claims for declaratory judgment, injunctive relief, accounting, or unjust enrichment

Judge Elizabeth Gobeil, writing for the Court, explained, similar to many others, that neither of the two causes of action for the claimed violations available in the Television Act applied. Judge Chris McFadden joined in the lead opinion with a concurring opinion re-affirming that streaming companies had no duty to secure franchises or pay franchise fees because such companies do not construct or operate networks in the public rights-of-way.

Read more details on the Georgia Court of Appeals case.