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