Case 3:21-cv-00561-MAB Document 1 Filed 06/09/21 Page 1 of 27 Page ID #1
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE SOUTHERN DISTRICT OF ILLINOIS
`
`CITY OF EAST ST. LOUIS, individually and
`on behalf of all others similarly situated,
`Plaintiff,
`
`v.
`
`Case No.:
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`3:21-cv-561
`
`NETFLIX, INC., DISNEY STREAMING
`
`SERVICES, LLC, APPLE INC., HULU, LLC,
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`HOME BOX OFFICE, INC., AMAZON.COM
`SERVICES, LLC, CBS ENTERTAINMENT, LLC,
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`YOUTUBE, INC., CURIOSITYSTREAM, INC,
`PEACOCK TV, LLC, DIRECTV CORPORATION,
`
`and DISH NETWORK SERVICE, LLC
`
`
`Defendants.
`
`Jury Trial Demanded
`
`PETITION FOR DECLARATORY JUDGMENT AND OTHER RELIEF
`CLASS ACTION COMPLAINT
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`Plaintiff City of East St. Louis (“Plaintiff” or “East St. Louis”), individually and on
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`behalf of all others similarly situated (the “Class,” as more fully defined below), brings
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`this action for declaratory judgment and other relief against Defendants Netflix, Inc.,
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`Disney Streaming Services, LLC, Apple Inc., Hulu, LLC, Home Box Office, Inc.,
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`Amazon.com Services, LLC, CBS Entertainment, LLC, YouTube, Inc., CuriosityStream,
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`Inc., Peacock TV, LLC, DirecTV Corporation, and Dish Network Service, LLC
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`(collectively “Defendants”) and for its Petition, states as follows:
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`1
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`Case 3:21-cv-00561-MAB Document 1 Filed 06/09/21 Page 2 of 27 Page ID #2
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`I.
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`INTRODUCTION
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`1.
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`Since 2007, the Cable and Video Competition Law of 2007 (the “Act”), 220
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`ILCS 5/21-100 et seq., has required providers of video service in Illinois to affirmatively
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`apply for and receive a video service authorization from the Illinois Commerce
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`Commission and pay video service provider fees to Illinois cities, villages, incorporated
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`towns, and counties.
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`2.
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`Defendants have and continue to provide video service in Illinois cities,
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`villages, incorporated towns, and counties. When doing so, Defendants transmit their
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`programming through wireline facilities located at least in part on public rights-of-way
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`within Illinois cities, villages, incorporated towns, and counties.
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`3.
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`However, rather than comply with the Act, Defendants evade their
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`statutory responsibilities and sidestep their obligations to pay video service provider fees
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`to Illinois cities, villages, incorporated towns, and counties.
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`4.
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`Accordingly, Defendants should be and are required by the Act to pay each
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`of those Illinois cities, villages, incorporated towns, and counties a video service provider
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`fee of up to 5% percent of their gross revenue, as derived from their providing video
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`service in each unit.
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`5.
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`Defendants have failed to pay the required fee, thereby necessitating this
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`Action, and entitling Plaintiff and the putative class to the relief requested herein.
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`2
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`Case 3:21-cv-00561-MAB Document 1 Filed 06/09/21 Page 3 of 27 Page ID #3
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`II.
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`PARTIES
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`4.
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`Plaintiff, the City of East St. Louis, Illinois, is municipally chartered as a
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`Home Rule Unit of local government pursuant to §6 of Article VII of the Illinois
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`Constitution and is duly authorized to bring this action. As a chartered Home Rule, East
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`St. Louis exercises thereunder all powers of local self-government.
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`5.
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`Defendant Netflix,
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`Inc.
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`(“Netflix”)
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`is a Delaware corporation,
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`headquartered in Los Gatos, California. Netflix’s primary business is its video service,
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`which offers online streaming of a library of films and television programs, as well as the
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`distribution and production of original films and television series. Netflix does business
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`in East St. Louis, Illinois, and has done so at all times relevant to this action.
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`6.
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`Defendant Disney Streaming Services, LLC (“Disney Streaming Services”)
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`is a Delaware corporation, headquartered in New York, New York. Disney Streaming
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`Services’ primary business is its video service, Disney+, which offers online streaming of
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`a library of films and television programs, as well as the distribution and production of
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`original films and television series. Disney Streaming Services does business in East St.
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`Louis, Illinois, and has done so at all times relevant to this action.
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`7.
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`Defendant, Apple
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`Inc.
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`(“Apple”)
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`a Delaware
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`corporation,
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`headquartered in Cupertino, California. Apple’s primary business is its video service,
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`Apple TV+, which offers online streaming of a library of films and television series.
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`
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`3
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`Case 3:21-cv-00561-MAB Document 1 Filed 06/09/21 Page 4 of 27 Page ID #4
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`Apple does business in East St. Louis, Illinois, and has done so at all times relevant to
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`this action.
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`8.
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`Defendant Hulu, LLC (“Hulu”) is a Delaware limited liability company,
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`headquartered in Santa Monica, California. Hulu’s primary business is its video service,
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`which offers online streaming of live video programming and a library of films and
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`television programs, as well as the distribution and production of original films and
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`television series. Hulu does business in East St. Louis, Illinois, and has done so at all
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`times relevant to this action.
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`9.
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`Defendant, Home Box Office, Inc. (“HBO”) is a New York corporation,
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`headquartered in New York City, New York. HBO’s primary business is its video service,
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`HBO Max, which offers online streaming of live video programming and a library of films
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`and television programs, as well as the distribution and production of original films and
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`television series. HBO does business in East St. Louis, Illinois, and has done so at all times
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`relevant to this action.1 2
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`10. Defendant, Amazon.com Services, LLC (“Prime”) is Delaware corporation,
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`headquartered in Wilmington, Delaware. Prime’s primary business is its video service,
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`Amazon Prime, which offers online streaming of live video programming and a library
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`1 HBO Max, which closed the third quarter at 8.6 million activated subscribers in the U.S., has added another four million to
`reach 12.6 million as of early December, according to AT&T CEO John Stankey. Dade Hayes, HBO Max Has Reached 12.6
`Million Activations, AT&T CEO John Stankey Reports, With Engagement Up 36% In Past Month, DEADLINE (Dec. 8, 2020),
`https://deadline.com/2020/12/hbo-max-streaming-12-6-million-subscribers-att-ceo-john-stankey-the-undoing-1234652083.
`2 As of September 30, the service had a nominal total of 28.7 million paying subscribers, including HBO pay television
`customers whose subscriptions make them eligible for free access to HBO Max, but who have not yet activated.
`4
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`Case 3:21-cv-00561-MAB Document 1 Filed 06/09/21 Page 5 of 27 Page ID #5
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`of films and television programs, as well as the distribution and production of original
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`films and television series. Prime does business in East St. Louis, Illinois, and has done so
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`at all times relevant to this action.
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`11. Defendant, CBS Entertainment, LLC (“CBS Entertainment”) is a New
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`York corporation headquartered in New York City, New York. CBS Entertainment’s
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`primary business is its video service, which offers online streaming of live video
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`programming and a library of films and television programs, as well as the
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`distribution and production of original films and television series. CBS Entertainment
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`does business in East St. Louis, Illinois, and has done so at all times relevant to this
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`action.3
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`12. Defendant, YouTube, Inc. (YouTube) is a Delaware corporation,
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`headquartered in San Bruno, California. YouTube’s primary business is its video
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`service, YouTube Premium, which offers online streaming of live video programming
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`and a library of films and television programs, as well as the distribution and
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`production of original films and television series. YouTube does business in East St.
`
`Louis, Illinois, and has done so at all times relevant to this action.
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`13. Defendant, CuriosityStream, Inc. (“CuriosityStream”) is a Delaware
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`corporation headquartered in Silver Spring, Maryland. CuriosityStream’s primary
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`3 Megan Graham, CBS All Access streaming service is getting a new name: Paramount+, CNBC (Sept. 15, 2020),
`https://www.cnbc.com/2020/09/15/cbs-all-access-rebranded-as-paramount-plus-.html.
`5
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`Case 3:21-cv-00561-MAB Document 1 Filed 06/09/21 Page 6 of 27 Page ID #6
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`business is its video service, which offers online streaming of live video programming
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`and a library of films and television programs, as well as the distribution and
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`production of original films and television series. CuriosityStream does business in
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`East St. Louis, Illinois, and has done so at all times relevant to this action.4 5
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`14. Defendant, PeacockTV, LLC (“Peacock”) is a Delaware corporation
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`headquartered in New York, New York. Peacock’s primary business is its video
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`service, which offers online streaming of live video programming and a library of films
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`and television programs, as well as the distribution and production of original films
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`and television series. Peacock does business in East St. Louis, Illinois, and has done so
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`at all times relevant to this action.6
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`15. Defendant, DirecTV Corporation (“DirecTV”) is a Delaware corporation
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`headquartered in El Segundo, California. DirecTV’s primary business is its video
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`service, which offers online streaming of live video programming and a library of films
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`and television programs. DirecTV does business in East St. Louis, Illinois, and has
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`done so at all times relevant to this action.
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`16. Defendant, DISH Network Service, LLC (“Dish”) is a Colorado
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`corporation headquartered in Englewood, Colorado. Dish’s primary business is its
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`4 Benjamin Mullin, Discovery Channel Founder Pivots After Hitting Ceiling for Cord-Cutter Bonanza, WSJ (Aug. 2, 2018),
`https://www.wsj.com/articles/discovery-channel-founder-pivots-after-hitting-ceiling-for-cord-cutter-bonanza-1533214801.
`5 Lucas Shaw, Streaming Services Quietly Gathers More Subscribers Than HBO Now, BLOOMBERG (Dec. 10, 2019),
`https://www.bloomberg.com/news/articles/2019-12-10/streaming-service-taps-stephen-hawking-to-outdraw-espn-hbo.
`6 Chaim Gartenberg, Peacock Hits Nearly 22 Million Users, But It's Not Clear How Many Are Paying, THE VERGE (Oct. 29,
`2020), https://www.theverge.com/2020/10/29/21539909/peacock-22-million-users-comcast-q3-2020-earnings.
`6
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`Case 3:21-cv-00561-MAB Document 1 Filed 06/09/21 Page 7 of 27 Page ID #7
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`video service, which offers online streaming of live video programming and a library
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`of films and television programs. Dish does business in East St. Louis, Illinois, and has
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`done so at all times relevant to this action.
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`III.
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`JURISDICTION AND VENUE
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`17.
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`This Court has jurisdiction over this action in accordance with 28 U.S.C.
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`§1332(a) and (d). Defendants are citizens of different states from that of the Plaintiff,
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`the putative class size is greater than 100, and the aggregate amount in controversy for
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`the proposed Class exceeds $5,000,000.00, exclusive of interest and costs.
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`18.
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`Venue is proper in this District, and this Court has personal jurisdiction
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`over Defendants, pursuant to 18 U.S.C. § 1965(a) and 28 U.S.C. § 1391(b), because a
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`substantial part of the events or omissions giving rise to the claims occurred in this
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`District, and because Defendants “transact affairs” in this District; each Defendant
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`continuously and systematically engaged in and continues to engage in business in
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`this District.
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`IV.
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`FACTUAL ALLEGATIONS
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`A. Statutory Authority to Bring this Action: 220 ILCS 5/21-100 et seq.
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`19.
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`In order to offer video service in Illinois, an entity is required under the
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`Act to obtain a “State-issued authorization.” 220 ILCS 5/21-401.
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`20.
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`The Act defines “video service” as “video programming and subscriber
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`interaction, if any, that is required for the selection or use of such video programming
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`7
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`Case 3:21-cv-00561-MAB Document 1 Filed 06/09/21 Page 8 of 27 Page ID #8
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`services, and that is provided through wireline facilities located at least in part in
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`the public rights-of-way without regard to delivery technology, including Internet
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`protocol technology…” 220 ILCS 5/21-201(v) (emphasis added).7
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`21.
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`The Act further defines “video programming” by incorporating the
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`definition set out in 47 U.S.C. § 522(20): “the term ‘video programming’ means
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`programming provided by, or generally considered comparable to programming
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`provided by, a television broadcast station.” See 220 ILCS 5/21-201(u).8
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`22.
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`In other words, under the Act, an entity is required to first seek
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`authorization before providing programming comparable to that provided by a
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`television broadcast station using wireline facilities located, at least in part, on the
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`public rights of way.
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`23. Defendants provide video service to their subscribers to view television
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`shows, movies, and documentaries, and compete with other cable or video providers,
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`offering video programming.9
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`7 The definition of “video service” continues as follows: “This definition does not include any video programming provided by a
`commercial mobile service provider defined in subsection (d) of 47 U.S.C. 332 or any video programming provided solely as part
`of, and via, service that enables users to access content, information, electronic mail, or other services offered over the public
`Internet.”
`8 In 1992, the Federal Communication Commission (“FCC”) interpreted that the definition of “video service” refers to what
`constituted broadcast television programming in 1984. 7 FCCR cd. 5781 at ¶74 (1992). While such programming is usually linear
`and multichannel, the FCC has determined that “video-on-demand images can be severed from the interactive functionalities and
`thereby constitute video programming.” 10 FCC Rcd. 244 at ¶¶103–111(1994).
`9 Pursuant to 220 ILCS 5/21-201(u), "video programming" has the same meaning as in 47 U.S.C. 522, the "Cable
`Communications Policy Act of 1984," Pub. L. No. 98-549, 98 Stat. 2781.
`8
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`Case 3:21-cv-00561-MAB Document 1 Filed 06/09/21 Page 9 of 27 Page ID #9
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`24. Defendants’ video programming is comparable to that provided by
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`television-broadcast stations and cable companies10 including, but not limited to, such
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`areas as format, genre, and content.
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`25. Defendants transmit video programming directly to subscribers located
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`within the geographic boundaries of the State of Illinois.
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`B. The Local ISP-Gateway to the Internet
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`26.
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`Each of the Defendants charge subscribers a fee to access their video
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`programming, like traditional cable companies and others offering video service in
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`Illinois who have obtained authorization and paid video service provider fees.
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`Defendants, thus, earn gross revenues from transmitting video programming to
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`subscribers through facilities located at least in part in a public right-of-way.
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`27. Defendants store their video content either within or directly connected
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`to the network facilities of local internet service providers, and then there deliver the
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`content to subscribers directly through a local Internet Service Provider (“ISP”) to
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`subscriber connections through wireline facilities located in the public right of way.
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`28. An ISP typically serves as the access point or the gateway that provides
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`a user, access to everything available on the Internet. The ISP is an organization that
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`provides a myriad of services for accessing, using, or participating in the Internet.
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`Internet service providers can be organized in various forms, such as commercial,
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`10 Pursuant to 47 U.S.C.A § 522(20), “video programming” means programming provided by, or generally considered
`comparable to programming provided by, a television broadcast station.
`9
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`Case 3:21-cv-00561-MAB Document 1 Filed 06/09/21 Page 10 of 27 Page ID #10
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`community-owned, non-profit, or otherwise privately owned. Internet services
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`typically provided by ISPs can include Internet access, Internet transit, domain name
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`registration, web hosting, Usenet service, and colocation.11
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`29. At first, ISPs generally offered dial-up connections, using the public
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`telephone network to provide last-mile connections to their customers. Later, ISPs
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`were accessed using cable television lines using broadband technology such as cable
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`modems and digital subscriber line (DSL). These lines and cables lie within public
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`rights of ways in the United States and in the State of Illinois.
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`30.
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`Customers view Defendants’ video programming—such as television
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`shows, movies, and documentaries—using an internet-connected device. Internet-
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`connected devices are electronic devices that have software enabling them to stream
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`Defendants’ video programming, including smart televisions, streaming media
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`players like Roku or Apple TV, tablets, smartphones, video game consoles, set-top
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`boxes from cable and satellite providers, Blu-ray players, and personal computers.
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`31.
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`Customers view the Defendants’ video programming by streaming it
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`over the internet, but none of the Defendants actually provide video programming
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`solely as part of and via service that enables users to access services over the public
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`internet. This is because the video programming offered was not over the public
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`Internet, as such services are offered only to paying subscribers.
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`11 What is an Internet Service Provider? WHAT IS MY IP ADDRESS (2021), https://whatismyipaddress.com/isp.
`10
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`Case 3:21-cv-00561-MAB Document 1 Filed 06/09/21 Page 11 of 27 Page ID #11
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`32. When a subscriber wants to watch the Defendants’ video programming,
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`he or she uses an internet-connected device to send a request to their local ISP. The ISP
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`then forwards that request to Defendants’ dedicated internet servers, which, in turn,
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`provide a response. This response is then relayed back to the subscriber’s device, and
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`Defendants deliver the video programming via internet protocol technology (i.e.,
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`broadband wireline facilities located at least in part in public rights-of-way).
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`C. Netflix, Open Connect and Cloud Computing
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`33. Defendant Netflix, Inc. is an American video streaming provider. When
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`a Netflix subscriber wants to view programming, the subscriber’s internet service
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`provider will connect the subscriber to the closest Netflix “Open Connect” server to
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`offer the fastest speeds and best video quality. Netflix has placed Open Connect
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`servers in nearly 1,000 separate locations in the United States.12
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`34. Open Connect is the name of the global network that is responsible for
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`delivering Netflix TV shows and movies to its members world-wide.13 Open Connect
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`is an open-source software application for connecting to virtual private networks
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`(VPN), which implement secure point-to-point connections, or “Content Delivery
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`Network” 14 (“CDN”) because its job is to deliver internet-based content (via
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`
`12 Michelle Clancy, Netflix Moves All Global Traffic to Open Connect CDN, RAPID TV NEWS (Mar. 19, 2016),
`https://www.rapidtvnews.com/2016031942170/netflix-moves-all-global-traffic-to-open-connect-cdn.html#axzz6m1ipHAmz.
`13 Netflix, Open Connect Overview, NETFLIX, INC. (2019), https://openconnect.netflix.com/Open-Connect-Overview.pdf.
`14 A content delivery network, or content distribution network (CDN), is a geographically distributed network of proxy servers
`and their data centers. The goal is to provide high availability and performance by distributing the service spatially relative to end
`users. CDNs came into existence in the late 1990s as a means for alleviating the performance bottlenecks of the Internet. Erik
`Nygren, et al., The Akamai Network: A Platform for High-Performance Internet Applications, AKAMAI TECHNOLOGIES 1, 2–19
`11
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`Case 3:21-cv-00561-MAB Document 1 Filed 06/09/21 Page 12 of 27 Page ID #12
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`HTTP/HTTPS) efficiently by bringing the content that people watch close to where the
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`subscriber is watching it.
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`35.
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`CDNs now serve a large portion of the Internet content, including web
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`objects (text, graphics and scripts), downloadable objects (media files, software,
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`documents), applications (e-commerce, portals), live streaming media, on-demand
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`streaming media, and social media sites.15
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`Content Delivery Network
`
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`In 2011, Netflix began its Open Connect initiative, as a response to the
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`
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`36.
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`ever-increasing scale of Netflix streaming, it stated, for two reasons:
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`a)
`
`b)
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`As Netflix grew to be a significant portion of overall traffic on consumer
`Internet Service Provider (ISP) networks, it became important to be able to
`work with those ISPs in a direct and collaborative way; and
`
`Creating a content delivery solution customized for Netflix to design a
`proactive, directed caching solution that is much more efficient than the
`
`(Sept. 13, 2012), https://www.akamai.com/us/en/multimedia/documents/technical-publication/the-akamai-network-a-platform-
`for-high-performance-internet-applications-technical-publication.pdf.
`15 Evi Nemeth, et al., Chapter 19, Web hosting, Content Delivery Networks, in UNIX AND LINUX SYSTEM ADMINISTRATION
`HANDBOOK 690, 690 (5th ed. 2018).
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`
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`12
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`Case 3:21-cv-00561-MAB Document 1 Filed 06/09/21 Page 13 of 27 Page ID #13
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`standard demand-driven CDN solution, reducing the overall demand on
`upstream network capacity by several orders of magnitude.16
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`37.
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`In order to accomplish these tasks, Netflix created Open Connect
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`
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`Appliances (“OCA”s) which store Netflix’s video content. OCAs are purpose-built
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`server appliances which store encoded video/image files and serve these files via
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`HTTP/HTTPS to client devices (for example: set top boxes, mobile devices, or smart
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`TVs). OCAs have the sole responsibility of delivering playable bits to client devices as
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`fast as possible. 17
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`38.
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`In order to traverse the public internet, large companies and cloud
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`service providers run datacenters, colloquially referred to as “the cloud.” 18 A
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`datacenter is a large building or group of buildings that house hundreds of inter-
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`connected computer systems, telecommunications, and other data storage systems.
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`Once that data is uploaded either remotely or through a live time transmission, that
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`data is sent to the closest datacenter to the original upload. The reason is simple, the
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`closer the data center, the faster the data reaches it.
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`
`16Netflix, Open Connect Overview, NETFLIX, INC. (2019), https://openconnect.netflix.com/Open-Connect-Overview.pdf.
`17 Id.
`18 Cloud computing is the on-demand availability of computer system resources, especially data storage (cloud storage) and
`computing power, without direct active management by the user. Large clouds, predominant today, often have functions
`distributed over multiple locations from central servers. If the connection to the user is relatively close, it may be designated an
`edge server. Ahmadreza Montazerolghaem, et al., Green Cloud Multimedia Networking: NFV/SDN Based Energy-Efficient
`Resource Allocation, IEEE 873, 873–889 (Mar. 23, 2020), https://ieeexplore.ieee.org/document/9044834.
`13
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`39.
`
`The top three cloud computing companies in the United States, as of
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`October 2020, are Amazon Web Service (AWS), Microsoft’s Azure and Google Cloud,
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`with AWS at nearly 32% of worldwide cloud infrastructure services.19
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`40. Netflix utilizes AWS for its cloud computing and explains this process
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`on its website:
`
`20
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`41. Netflix provides the OCAs to qualifying internet service providers and
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`the OCAs are then deployed directly inside the IPA networks. The internet service
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`provider partner uses the OCA to provide video content to its Netflix subscribers.
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`Close to 90% of Netflix’s global traffic is delivered via these direction connections
`
`
`19 Jay Chapel, AWS vs Azure vs Google Cloud Market Share 2020: What the Latest Data Shows, PARKMYCLOUD (Nov. 23,
`2020), https://jaychapel.medium.com/aws-vs-azure-vs-google-cloud-market-share-2020-what-the-latest-data-shows-
`dd700fd75c2d.
`20 Netflix, Open Connect Overview, NETFLIX, INC. (2019), https://openconnect.netflix.com/Open-Connect-Overview.pdf.
`14
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`Case 3:21-cv-00561-MAB Document 1 Filed 06/09/21 Page 15 of 27 Page ID #15
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`between OCAs and the internet service providers Netflix customers use to access the
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`internet.21
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`42. According to Netflix, that means that most of its subscribers receive
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`Netflix’s video programming from servers either inside of, or directly connected to,
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`the subscriber’s internet service provider’s network within their local region. Netflix
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`has “end-to-end” control of its entire Open Connect system, including any servers
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`located in East St. Louis and/or other Illinois municipalities and/or counties.
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`D. Other Defendants also use ISP and Cloud Computing to Stream Video Content
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`43.
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`Similar to Netflix, when streaming subscribers want to view the other
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`Defendants’ video programming, the subscriber’s Internet service provider will
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`connect the subscriber to the server.
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`44.
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`These Defendants receive the directive and check the subscriber’s
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`entitlement, the location, and the content availability. It then delivers the program to
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`the subscriber’s internet-connected device via the internet. These Defendants place
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`video content onto servers either inside of or directly connected to an internet service
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`provider, and from there, the internet service provider directly delivers the content to
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`a customer.
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`E. Use of Public Rights of Ways
`
`
`21 Ken Florance, How Netflix Works With ISPs Around the Globe to Deliver a Great Viewing Experience, NETFLIX (Mar. 17,
`2016), https://about.netflix.com/en/news/how-netflix-works-with-isps-around-the-globe-to-deliver-a-great-viewing-experience.
`15
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`Case 3:21-cv-00561-MAB Document 1 Filed 06/09/21 Page 16 of 27 Page ID #16
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`45. Defendants’ subscribers typically use a broadband internet connection,
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`such as DSL or fiber optic cable to receive Defendants’ programming. In East St. Louis,
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`common providers of broadband internet include Spectrum, EarthLink, AT&T,
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`MediaCom, Wisper, Frontier and others.
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`46.
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`Broadband internet connections rely upon wireline facilities located in
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`whole or in part in the public right(s)-of-way to deliver internet service to subscribers.
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`That means that Defendants operate and provide their video service to Defendants’
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`subscribers through wireline facilities located, at least in part, in the public right-of-
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`way, because they use these broadband internet connections in the public right-of-way
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`to stream their programming.
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`47.
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`There are no requirements in the Act for Defendants to construct, own,
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`or operate these wireline facilities. The wireline facilities can be owned and operated
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`by a third party. Thus, it is of no consequence that Defendants do not place wires and
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`cables under streets, because Defendants’ subscribers use broadband internet
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`connection, which employs DSL or fiber optic cable, to receive Defendants’
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`programming.
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`16
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`Case 3:21-cv-00561-MAB Document 1 Filed 06/09/21 Page 17 of 27 Page ID #17
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`48.
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`In fact, the Act states that video service can both be provided and is
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`provided through wireline facilities located at least in part in the public rights-of-way
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`without regard to delivery technology, including Internet protocol technology.22
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`49. As made manifest in the Act, the Illinois legislature intended the Act to
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`video service providers such as the Defendants, not simply cable companies.23
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`F. Defendants Skirt Illinois Commerce Commission Video Service Authorization
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`50. As video service providers using wireline facilities and the rights-of-
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`ways, Defendants were required to apply for and receive a state-issued video service
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`authorization obtained from the Illinois Commerce Commission. 24 Additionally,
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`Defendants were required to provide ten days’ advance written notice to Plaintiff and
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`other Illinois municipalities before it started providing its video service in those
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`jurisdictions.25
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`22 Pursuant to 220 ILCS 5/21-201(v), "Video service" means “video programming and subscriber interaction, if any, that is
`required for the selection or use of such video programming services, and that is provided through wireline facilities located at
`least in part in the public rights-of-way without regard to delivery technology, including Internet protocol technology.”
`23 Pursuant to 220 ILCS 5/21-201, the legislative findings regarding video service are, inter alia, “investment in new
`communications, cable services, and video services infrastructure, including broadband facilities, fiber optic, and Internet
`protocol technologies,” and “increasing consumer access to robust and reliable broadband products” and “enable rapid and
`widespread entry by competitive providers, which will bring to Illinois consumers the benefits of video competition, including
`providing consumers with more choice, lower prices, higher speed and more advanced Internet access, more diverse and varied
`news, public information, education, and entertainment programming, and will bring to this State and its local units of
`government the benefits of new infrastructure investment, job growth, and innovation in broadband and Internet protocol
`technologies and deployment.”
`24 Pursuant to 220 ILCS 5/21-401(a)(1), “A person or entity seeking to provide cable service or video service pursuant to this
`Article shall not use the public rights-of-way for the installation or construction of facilities for the provision of cable service or
`video service or offer cable service or video service until it has obtained a State-issued authorization to offer or provide cable or
`video service under this Section….”
`25 Pursuant to 220 ILCS 5/21-801(a), “Prior to offering cable service or video service in a local unit of government's jurisdiction,
`a holder shall notify the local unit of government. The notice shall be given to the local unit of government at least 10 days before
`the holder begins to offer cable service or video service within the boundaries of that local unit of government.”
`17
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`Case 3:21-cv-00561-MAB Document 1 Filed 06/09/21 Page 18 of 27 Page ID #18
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`51. Defendants failed to apply for, and receive, a state issued video service
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`authorization pursuant to the Act. Indeed, the Illinois Commerce Commission lists the
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`persons or entities which have received a valid state issued certificate, and none of the
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`Defendants appear on the Illinois Commerce Commission list with approved
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`authorizations. 26 Additionally, Defendants failed to provide ten days’ advance,
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`written notice to Plaintiff and other Illinois municipalities and counties, and, therefore,
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`have been and continue to provide video service throughout Illinois without legal
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`authorization, and in contravention of the Act.
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`52. Had Defendants provided the statutorily required ten days’ advance,
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`written notice, then Plaintiff and other Illinois municipalities and counties would have
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`been provided an opportunity, as set forth in the Act, to notify Defendants of the
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`percentage of gross revenues required to be paid for providing video service in those
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`jurisdictions (i.e., the video service provider fee).27
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`53.
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`The Act authorizes video service providers, such as Defendants, to use
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`public rights-of-way, as long as said video service providers make a quarterly video
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`service provider payment to each municipality and county in which it provides video
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`
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`26 As of February 10, 2021.
`27 Pursuant to 220 ILCS 5/21-801(b), “[i]n any local unit of government in which a holder offers cable service or video service on
`a commercial basis, the holder shall be liable for and pay the service provider fee to the local unit of government.”
`18
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`Case 3:21-cv-00561-MAB Document 1 Filed 06/09/21 Page 19 of 27 Page ID #19
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`service. 28 The required video service provider payment is 5% of gross revenues 29
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`received by the franchise holder from the provision of video services in that unit of
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`local government.
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`54. Defendants were required to obtain a state-issued certificate of authority
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`pursuant to the Act before providing their video service in East St. Louis and the other
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`Illinois municipalities and counties, just as others who provide video servicers have.
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`Defendants’ failure to obtain a certificate of authority, however, did not relieve
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`Defendants of the obligation to pay a video service provider fee of 5% of their gross
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`revenues derived from providing such video service in those counties and
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`m