On September 3, 2021, the United States District Court for the District of Nevada held that streaming video providers were not subject to Nevada localities’ franchise fees. The city of Reno filed a class action lawsuit against two streaming video providers, claiming that they were required to register as video service providers (i.e., obtain a certificate of authority) and pay local franchise fees. A “video service provider” is “any person that provides or offers to provide video service over a video service network to subscribers[.]”  Nev. Rev. Stat. § 711.151(1) (emphasis added).  The term “video service” excludes “[a]ny video content provided solely as part of, and through, a service which enables users to access content, information, electronic mail or other services that are offered via the public Internet.” Nev. Rev. Stat. § 711.141(3)(a).  The court held that the streaming video providers were not “video service providers” because they satisfied this exclusion from “video service.” The court rejected the city’s arguments that the taxpayers did not qualify for the exclusion because: (1) the providers’ video streaming offering must be only a part, rather than the entirety, of the service; and (2) the “public” Internet is no longer public if a fee is charged for its usage.

The court also concluded that local governments do not have a private right of action under the Nevada video service laws to contest that the streaming video providers must obtain certificates of authority to provide video service in Nevada and owe franchise fees to the localities. Rather, the Nevada Attorney General must bring any such claim.

City of Reno, Nevada v. Netflix, Inc. et al., Case No. 3:20-cv-00499-MMD-WGC (D. Nev. Sept. 3, 2021).