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Monday, October 23, 2023

7th Circuit Dismisses City's Lawsuit Against Internet Streaming Services

In a recent decision, the Seventh Circuit Court of Appeals ruled against a municipality that had sued Netflix and other internet streaming services claiming the services were operating as unlicensed video service providers in violation of the Illinois Cable and Video Competition Law. City of East St. Louis v. Netflix.   

The city claimed the streaming services were "covered video service providers" operating without statewide authorization under the Illinois Cable and Video Competition Law (CVCL) and were required to pay a portion of their revenue to each municipality in Illinois. The city also raised common law trespass and municipal ordinance violation claims. The district court dismissed the city’s lawsuit, ruling the CVCL only allowed the state Attorney General to sue entities alleged to be operating without the required statewide authorization.

The city appealed, and the Seventh Circuit upheld the dismissal, rejecting the city’s claims. First, the Court held that internet streaming services were exempt from the CVCL’s definition of video service, and that content streamed over the internet is not covered under the CVCL’s regulatory scheme. Second, the Court held that transmitting streaming content through wires that crossed city-owned land was not a trespass. Finally, the Court held that internet streaming services did not violate a city ordinance prohibiting the re-sale of cable television services as the streaming services provided different services than traditional cable television providers. 

Post Authored by Tyler Smith & Julie Tappendorf, Ancel Glink


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