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Plano, Frisco suing streaming services Netflix, Hulu, Disney+

In the first episode of “The Real Housewives of Dallas,” LeeAnne Locken, a former Miss USA finalist, teaches viewers to be serious.
Collin County Cities Suing Streaming Services
Ivan Marc /

In the first episode of “The Real Housewives of Dallas,” LeeAnne Locken, a former Miss USA finalist, teaches viewers to be serious. Brandi Redmon, a former Dallas Cowboys Cheerleader, and Stephanie Hollman, a Dallas-based entrepreneur, are on camera attending a charity event talking about “pooping and farting” as they eat hors d'oeuvres.

LeeAnne, side-eyeing the girls and clearly listening in on their conversation, says of the silliness, “It’s a little Plano in here.”

In her cutaway interview, LeeAnne, who eventually left the show, drags Brandi, who lived in Plano at the time of filming, and Stephanie for how they act at North Texas charity events, using the lavish social gatherings to drink and cut up. “I don’t think they’re very serious about it,” she says. “You either take it serious, or go home.”

Last week, Plano got a little more serious.

Plano city officials announced June 14 that they were joining other municipalities around the country, including Dallas and Frisco, and suing streaming services such as Disney+, Netflix, Hulu — which offers “The Real Housewives of Dallas.”

They're asking that streaming services also be responsible for paying a franchise fee of 5 percent of each service's gross revenue similar to cable companies, which offer their infrastructure for streaming services to use.

In Plano, city spokesperson Steve Stoler addressed a request to interview the city manager with a prepared statement from the city attorney’s office.

“The City Attorney’s office is asking the City Council to authorize Plano to join the City of Dallas and other cities in Texas in a lawsuit against streaming video services such as Netflix and Hulu to require them to pay a franchise tax of 5 percent of their gross revenue for use of the public rights of way which is the same fee imposed on cable video providers,” the statement reads. “State law requires city contingency legal fee contracts to be authorized by the City Council and Texas Attorney General.”

Plano, Frisco, and Dallas weren't the first Texas cities seeking to tap into the extremely popular streaming services revenue. Last year, as local budget holes emerged in the wake of the economic shutdown due to the pandemic, New Boston sued Netflix and Hulu, seeking to establish the streaming services as basically the same as any cable provider.

Because they utilize DSL or fiber optic cables to connect local customers to the internet, New Boston alleged the streaming services operate just like DIRECTV and should have to pay franchise taxes. Since they allegedly failed to obtain the authority to operate from the Texas Utility Commission, New Boston and other cities want Netflix and Hulu to get the same permits as traditional cable providers and pay each city a fee each quarter to continue operating.

It's unclear why they waited this long to sue since Netflix has been using those services since 2007. Netflix obviously disagrees with the cities' claims and argues that cities like Plano, Frisco and Dallas are simply looking to create a way "to tax digital video content provided over the Internet in violation of state and federal law," according to a filing, as reported by the Dallas Business Journal in a Feb. 22 report.

Earlier this year, the Dallas City Council voted for suing streaming companies for potentially millions of dollars in fees. A Dallas spokesperson told the Business Journal in the Feb. 22 report that the streaming companies didn't apply for the state-issued certificate of franchise authority under Texas Utility Code Chapter 66.

The plaintiff cities, arguing under the Texas Public Utility Regulatory Act, claim video streaming companies who have customers in a given municipality should be held to the same legal standard as cable providers, which have had to pay these franchise taxes under the law.

Like Dallas city attorneys, Plano’s have contracted with multiple law firms that are suing streaming companies Netflix, Hulu and Disney+ for municipalities across the United States. The firms, McKool Smith, Ashcroft Sutton Reyes and Korean Tillery, point out that streaming companies use land-based facilities and wirelines throughout cities to send customers episodes of "Real Housewives" to their devices at home, and should have to pay for the use.

At a mid-June council meeting, Frisco city leaders followed Dallas' and Plano's lead. Frisco spokesperson Dana Baird did not answer a request for an interview.

Though Plano and Frisco are just now joining the class action in suing streaming companies, law firms representing Netflix and Hulu have had the chance to fire back in court. In the New Boston case, lawyers for the companies say the suit will set a precedent that will require all companies who use the internet to reach customers to pay cities taxes for using local infrastructure.

So that means the access to visit the Shop By Bravo website to buy a LeeAnne Locken mug — "I'M A TRUE TEXAN, NO BULL BUT ALL HORNS" — might start costing more. The companies argue any new fees will be passed down to consumers.

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