AT&T (NYSE: T) has been sued by Herring Networks for $100 million, with the indie programmer alleging the DirecTV operator reneged on promises to carry its networks in exchange for supporting its purchase of the satellite TV company last year.
Herring, which owns One America News Network and A Wealth of Entertainment, also complains that when it signed carriage agreements with AT&T for its U-verse platform, it was unaware that the operator would soon shift its growth focus to DirecTV.
"First, this case is about AT&T's misrepresentations to — and concealment from — Herring to induce Herring to enter into an agreement in which AT&T distributed Herring's two channels on AT&T's U-verse TV platform," the suit said. "When the parties negotiated and entered into their agreement, AT&T led Herring to believe that U-verse TV — AT&T's new television distribution service — would continue to expand and grow. But unbeknownst to Herring, AT&T had decided to acquire DirecTV and wind-down U-verse, i.e., move AT&T's pay-TV customers to the DirecTV system. AT&T paid $65 billion (with debt) for DirecTV and does not want to have two competing television services."
Also in the suit, Herring said that James Cicconi, AT&T's senior VP of external and legislative affairs, "promised Herring distribution on DirecTV in return for lobbying regulators for approval of the DirecTV acquisition."
AT&T responded with this statement: "The lawsuit is baseless. We have offered to carry both channels on DirecTV at reasonable, market-based terms. This lawsuit is simply a ploy by Herring to negotiate a slanted deal."
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