AT&T Sued Over Refusal to Carry Al Jazeera Cable Network

AT&T Inc. (T), the largest U.S. phone company, was sued by Al Jazeera over its refusal to to carry the Qatar-based broadcaster’s new U.S. cable-news channel as part of its pay-television service.

The Dallas-based company is violating an agreement with Al Jazeera’s U.S. unit by refusing to broadcast the channel, which began airing in the U.S. yesterday, according to a filing in Delaware Chancery Court. The network, controlled by the Qatari royal family, paid $500 million for Al Gore’s money-losing Current TV in January and rebranded it.

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.

AT&T officials’ decision amounts to a “wrongful termination of an affiliation agreement,” Al Jazeera said in the filing, which accompanied a sealed complaint. Details on the case came from a cover sheet that contained a brief description of the network’s claims.

Under the court’s rules, a public version of the complaint must be filed within five days unless a judge grants an extension to the sealing of the case.

‘Certain Breaches’

“As a result of our inability to come to terms on a new agreement and due to certain breaches of the existing agreement we have decided not to carry Current TV on U-verse,” Brad Burns, an AT&T spokesman, said yesterday in an e-mailed statement.

Al Jazeera officials contend the AT&T left them “no choice” other than to file a breach-of-contract suit over the decision to drop the channel, according to an e-mailed statement,

“AT&T’s decision to unilaterally delete Al Jazeera America presented us with circumstances that were untenable -- an affiliate that has willfully and knowingly breached its contractual obligations,” Stan Collender, a partner in Qorvis Communications in Washington, said on behalf of the broadcaster. The aim of the suit is to “compel AT&T to do the right thing,” he added.

Pay-TV Homes

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), DirecTV (DTV) and Dish Network Corp. (DISH) 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), which has 12 million customers, dropped the channel from its lineup in January.

Officials of Time Warner, the second-largest U.S. cable company, are still negotiating with Al Jazeera America on a deal to carry the network, said spokeswoman Maureen Huff, who declined to comment on the AT&T lawsuit.

Al Jazeera America started service at 3 p.m. New York time yesterday with “This is Al Jazeera: Preview Hour,” followed by news headlines at 4 p.m. A rundown of Al Jazeera America’s top U.S. stories on its website yesterday included California to force-feed inmates on hunger strike and the CIA admitting to its role in a 1953 Iran coup.

To boost its appeal, Al Jazeera brought on CNN personalities such as Soledad O’Brien, Ali Velshi and Emmy Award-winner Michael Okwu. Programs include “Real Money” with Velshi and current affairs program “Consider This” with former ABC News correspondent Antonio Mora.

U.S. News

The channel’s domestic U.S. news will be complemented by reports from more than 400 international correspondents -- many stationed in countries where few Western reporters venture.

The channel, which has hired about 700 staffers for a dozen U.S. bureaus including Nashville, Tennessee, New Orleans and Detroit, still must appeal 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.

Ex-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.

The case is Al Jazeera LLC v. AT&T Services Inc., CA 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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