Netflix and Hulu don't own or lay cable, they don't need right-of-way. As I understand it, the tax is already levied on cable providers and ISPs. I don't think it's good or bad, because Netflix/Hulu will just charge customers in those cities more (or refuse service).
It's a bit dumb to search for a legal technicality in the state law to raise taxes and avoid public scrutiny, if the cities need money from their residents they can raise property taxes (or cut services). But my guess is that is less politically expedient. However the tax payers now have to foot the bill for the lawsuit, so who really wins?
