Lawyers for Al Jazeera’s new U.S. news channel allege that AT&T Inc. (NYSE:T) “acted in bad faith” when it decided to cancel plans to include the channel in their packaging, Bloomberg reports. The Qatar-based broadcast says that AT&T — the largest U.S. phone company — conceived of a “pretextual scheme” in order to drop Al Jezeera America from its U-verse pay-TV service — and only right before the channel was set to start broadcasting earlier in the week.
While the details of the agreement are redacted due to confidential information, Al Jazeera lawyers said that the move gave the Dallas-based phone company the chance to “pocket millions of dollars to which it was not entitled.”
The AT&T U-verse pay-TV service revealed it wouldn’t carry Al Jazeera America on August 19, citing a contract dispute. AT&T spokesman Brad Burns told Bloomberg in an emailed statement, “Al Jazeera has mischaracterized the facts.” He continued, “Due to certain breaches by Al Jazeera, AT&T terminated the agreement and will no longer carry Current TV on U-Verse.”
In January, Al Jazeera bought Current TV, giving it access to nearly 43 million homes in the U.S., which is only half of pay-TV homes. U-verse is the second TV provider to drop Al Jazeera America since that deal — the first being Time Warner Cable (NYSE:TWC), which dropped the channel in January and has 12 million customers.
Al Jazeera asserts that it was in “full compliance” when it came to the agreement with AT&T broadcasting, but the news might be a more deep-seeded issue with the way in which Al Jazeera is perceived in the U.S. — especially in the South and Southwest, where AT&T’s U-verse has a large subscriber-base.
Bloomberg suggests that American audiences still associate Al Jazeera with anti-American sentiment, following its decision to screen Osama bin Laden’s video messages following the attacks on September 11, 2001. Former President George W. Bush famously considered Al Jazeera as being sympathetic to terrorists while the network exacerbated its public image by broadcasting images of civilian casualties in a battle in Fallujah, Iraq, and the U.S. military’s accidental bombing of its Baghdad office, both in 2003.
Al Jazeera is asking Chancery Judge Sam Glasscock for one of two options from AT&T: honor the agreement by allowing Al Jazeera America to be broadcast on U-verse, or pay the network compensatory damages.