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University of Memphis Law Review

Authors

Shannon M. Crow

Abstract

When compared to traditional cable companies, streaming platforms and their distinctive methods of delivering entertainment make them seemingly untouchable—not only in competitive markets, but also in the courtroom. The Tennessee Supreme Court in City of Knoxville v. Netflix, Inc. (“Netflix”) ruled that Netflix and Hulu did not provide video programming through wireline facilities under the Competitive Cable and Video Services Act (“CCVSA”).1 Netflix arose out of an action brought in the United States District Court for the Eastern District of Tennessee by the City of Knoxville against Netflix and Hulu (“Defendants”).2 The City of Knoxville argued that Defendants were required to obtain a franchise and pay franchise fees because of their use of public rights-of-way to provide video service.3 The district court found that several factors, including the “value of comity” and lack of guiding precedent, weighed in favor of certifying a question of state law to the Tennessee Supreme Court (“Supreme Court”).4 The Supreme Court accepted the following certified question: “[w]hether Netflix and Hulu are video service providers, as that term is defined in the relevant provision of [the CCVSA].”5 Framing the question solely as one of statutory interpretation, the Supreme Court answered in the negative and held that Defendants did not provide “video service” within the meaning of the Act. Competitive Cable and Video Services Act (“CCVSA”).1 Netflix arose out of an action brought in the United States District Court for the Eastern District of Tennessee by the City of Knoxville against Netflix and Hulu (“Defendants”).2 The City of Knoxville argued that Defendants were required to obtain a franchise and pay franchise fees because of their use of public rights-of-way to provide video service.3 The district court found that several factors, including the “value of comity” and lack of guiding precedent, weighed in favor of certifying a question of state law to the Tennessee Supreme Court (“Supreme Court”).4 The Supreme Court accepted the following certified question: “[w]hether Netflix and Hulu are video service providers, as that term is defined in the relevant provision of [the CCVSA].”5 Framing the question solely as one of statutory interpretation, the Supreme Court answered in the negative and held that Defendants did not provide “video service” within the meaning of the Act. and guidance for courts and litigants faced with future issues of “fitting new technology into [] not-so-new statutory scheme[s].”7 Part II of this Comment provides an overview of the evolution of cable and video service regulation as well as case law relevant to the issue. Part III provides a summary of the facts and procedural history that led to Netflix. Part IV analyzes the Supreme Court’s reasoning and the impact of its holding. Part V discusses how the Supreme Court’s failure to fully analyze the issues raised—including the doctrine of comity— risks future judicial inefficiency by leaving the door open for federal courts to decide disputes more appropriately heard by Tennessee state courts.

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