AT&T fired back Tuesday at a lawsuit filed by Herring Networks last week over carriage issues, calling it baseless and a negotiation tactic.
“The lawsuit is baseless. We have offered to carry both channels on DIRECTV at reasonable, market based terms," AT&T responded in a statement. "This lawsuit is simply a ploy by Herring to negotiate a slanted deal.”
Herring filed the $100 million lawsuit last week in a California U.S. District Court, alleging fraud and concealment by AT&T and breach of contract, saying when it renewed its carriage agreement last April, AT&T failed to inform it was planning to acquire DirecTV and "wind down" U-Verse television.
It is certainly no secret that AT&T has long been backing off plans to build out U-Verse, but last month when reports surfaced it was no longer going to be making U-Verse set-tops, AT&T said it was not winding down the service.
"To realize the many benefits of our DirecTV acquisition, we are leading our video marketing approach with DirecTV," AT&T said at the time. "However, our first priority is to listen to our customers and meet their needs, and if we determine a customer will be better served with the U-verse product, we offer attractive and compelling options." But Herring says AT&T is reneging on its promise to carry its One America News and AWE networks on DirecTV.
In talking about the suit, Herring cited the FCC's recent vote to launch an inquiry into access by independent and diverse networks to distribution platforms, saying this was an example of AT&T's "bullying independent and diverse sources of programming."
"Recently, the FCC issued a Notice of Inquiry (NOI) specifically addressing the abuses facing independent and diverse sources of video programming, with FCC Chairman Tom Wheeler stating, 'The FCC has a congressional mandate to foster a diverse, robust and competitive marketplace for video programming. We take this obligation seriously, and today, we take action to better understand the barriers facing independent programmers,'" Herring said in announcing the suit.
“We concluded a long-term agreement with AT&T for broad carriage of One America News Network and AWE just one month prior to AT&T’s acquisition announcement of DirecTV," Herring President Charles Herring told B&C. "The numerous issues we are facing now with AT&T for carriage on DirecTV is exactly why Commissioner [Mignon] Clyburn, driven by conversations during the AT&T/DirecTV merger process, advocated for the recent Notice of Inquiry issued by the FCC. The NOI seeks to understand the anticompetitive challenges and burdens faced by independent and diverse sources of programming. It’s clear that AT&T is purging subscribers off U-verse and onto DirecTV, directly impacting our business.”
Elsewhere on the U-Verse front, Univision has been unable to strike a new deal for carriage of its TV stations or networks.