Bloomberg News

AT&T Accused of Wrongfully Canceling Al Jazeera’s U.S. Channel

August 24, 2013

AT&T Inc. (T:US) “acted in bad faith” when it pulled the plug on Al Jazeera’s new U.S. channel, lawyers for the Qatar-based broadcaster said in court filings.

AT&T, the largest U.S. phone company, came up with a “pretextual scheme” to justify dropping Al Jazeera America from its U-verse pay-TV service just before the channel started broadcasting earlier this week, Al Jazeera’s lawyers said in an unsealed lawsuit.

The move gave Dallas-based AT&T an opportunity to “simply pocket millions of dollars to which it was not entitled,” the network’s lawyers said in the suit, which has been heavily redacted to protect the agreement’s confidential information.

AT&T’s U-verse pay-TV service said Aug. 19 it wouldn’t carry Al Jazeera America because of a contract dispute. U-verse began in 2006 and has 5 million video customers in states such as Texas and California. The network, controlled by the Qatari royal family, paid $500 million for Al Gore’s money-losing Current TV in January and rebranded it.

“Al Jazeera has mischaracterized the facts,” Brad Burns, an AT&T spokesman, said in an e-mailed statement. “Due to certain breaches by Al Jazeera, AT&T terminated the agreement and will no longer carry Current TV on U-Verse.”

Soccer Leagues

Buying Current TV gave Al Jazeera America access to about 43 million homes nationwide, less than half of all pay-TV homes. The Qatari company also has deals with Comcast Corp. (CMCSA:US), DirecTV (DTV:US) and Dish Network Corp. (DISH:US) for BeIN Sport, a group of channels it owns in France, the U.S. and Canada that have rights to European soccer leagues.

U-verse is the second TV provider to drop Al Jazeera’s channel since it acquired Current TV. Time Warner Cable (TWC:US), which has 12 million customers, dropped the channel from its lineup in January.

Al Jazeera officials said they were in “full compliance” with the agreement covering AT&T’s broadcasting of the Current TV channel and “AT&T’s excuse for terminating is a bad-faith pretext,” according to the unsealed suit.

Attorneys for the network also said in the suit AT&T’s U-verse has a large subscriber base in “Texas and other conservative states in the South and Southwest.”

The channel’s executives must find a way to an American audience that remembers Al Jazeera as the forum for Osama bin Laden’s video messages after the terrorist attacks on the U.S. on Sept. 11, 2001.

Damages Sought

Former President George W. Bush considered the network sympathetic to terrorists, and the U.S. government was angered when Al Jazeera broadcast images of civilian casualties during a 2003 battle in the Iraqi City of Fallujah. That same year, the U.S. military mistakenly bombed Al Jazeera’s Baghdad office, killing some of its journalists.

Al Jazeera wants Chancery Judge Sam Glasscock to order AT&T to honor the agreement and allow Al Jazeera’s U.S. channel to be broadcast on U-verse or to force the communications company to pay compensatory damages, according to the suit.

The case is Al Jazeera LLC v. AT&T Services Inc., 8823, Delaware Chancery Court (Wilmington).

To contact the reporter on this story: Jef Feeley in Wilmington, Delaware, at jfeeley@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net


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