AT&T Faces $10 Billion Race Discrimination Suit

By Freddie Allen
NNPA Senior Washington Correspondent

WASHINGTON (NNPA) – A group that advocates for economic inclusion and fair contracting for Black-owned media recently filed a $10 billion lawsuit alleging racial discrimination against AT&T and DirecTV.

The National Association of African American Owned Media (NAAAOM) filed the lawsuit for an unnamed company that “owns seven original content, high defi­nition television networks (channels), six of which were launched to public in 2009 and one in 2012” and according to the complaint “is the only 100 percent Af­rican American-owned video programming producer and multi-channel operator/own­er in the United States.”

The suit alleges that AT&T and DirecTV violated a fed­eral statute (Title 42 U.S. Code 1981) found in the Civ­il Rights Act of 1866, a law that was originally designed to protect freed slaves from discrimination as they joined the labor market and entered business contracts.

Marty Richter, a spokes­man for AT&T, called the allegations ‘outlandish’ and ‘completely baseless,’ and said that the company spent $15.5 billion with diverse suppliers last year.”

Skip Miller, the lead trial counsel for the plaintiff and partner with the Miller Bar­ondess, LLP law firm in Los Angeles, said his firm is going up against one of the largest corporations in the United States with vast resources, but it’s a lawsuit like any other lawsuit.

“The real deal is the mon­ey, that’s what this is about,” said Mark DeVitre, president of NAAAOM. “It’s about economic inclusion in main­stream America. The First Amendment requires diver­sity.”

According to the lawsuit, AT&T and DirecTV, collec­tively pay White-owned me­dia companies approximate­ly $16 billion combined, every year for channel car­riage license fees, but don’t pay anything to 100 percent African American-owned media companies.

Even though AT&T ex­ecutives admitted that they have a “Black problem” to the company, according to the lawsuit, they have largely adopted a “wait and see” ap­proach, refusing to increase the amount of business they do with the Black media company, unless it has a neg­ative impact on their merger with DirecTV.

“They [AT&T], just said, ‘No,’” said Miller. “‘We know you have good pro­gramming, but we don’t want to deal with you.’”

AT&T carries one of the unnamed company’s seven channels, but instead of paying carriage fees to the company, the telephone and media conglomerate requires that the company pay AT&T hundreds of thousands of dollars per year for the pro­gramming.

“Ultimately, AT&T stated that it would consider en­tering into a carriage agree­ment with the Company only if AT&T’s and DirecTV’s lack of 100 percent African-American owned channels interferes with approval of the acquisition,” states the complaint filed on December 3.

“Otherwise, AT&T would continue to refuse to contract with the Company for its suite of channels, and would shut out the Company from its billions in channel car­riage license fees and adver­tising and expenditures.”

The suit also alleges that AT&T and other White-owned media companies do­nate money to nationally-rec­ognized civil rights groups in an effort to “buy” their sup­port, actions the complaint calls “window dressing and a deceptive practice.”

“They can get up there say, ‘We support the Urban League.’ Those are all good organizations,” said Miller. “But what does that have to do with the media business?”

DeVitre said those contri­butions don’t have anything to do with getting African American voices and view­points on television.

According to the legal document, 100 percent Afri­can American-owned media receive less than $1.5 mil­lion of the approximately $4 billion that AT&T spends on advertising, every year.

“Likewise, DirecTV al­legedly spends less than $1.5 million of its $2 bil­lion in advertising costs each year on 100 percent African American-owned business,” according to the suit.

That amounts to fourteen thousandths of 1 percent spent annually with 100 percent African American-owned media.

The NAAAOM complaint stated: “This is an econom­ic atrocity, illustrating the scope and magnitude of the racial discrimination in con­tracting by AT & T and Di­recTV.”

The suit alleges that AT&T’s racial discrimi­nation in contracting will continue to perpetuate the economic exclusion of 100 percent African American-owned media from American television.

“But for AT&T’s and Di­recTV’s refusal to contract with the Company, the Com­pany would receive approxi­mately $328 million in an­nual license fees for its seven channels – calculated using a conservative license fee of fifteen center per subscriber per month for each channel for AT & T’s and DirecTV’s combined 26 million sub­scribers. If Defendants con­tracted in good faith, the Company would also receive an estimated $100 million per year, per network, in national advertising sales revenue, or a total of $700 million per year,” according to the complaint.

Miller said it would be hard for his client to survive without doing business with AT&T and access to their roughly 26 million subscrib­ers after the DirecTV deal, which would account for nearly 30 percent of the pay TV market. The proposed AT&T/DirecTV deal and the Comcast/NBC Universal deal have received lukewarm receptions from industry watchers.

DeVitre said that AT&T’s refusal to increase the busi­ness they do with 100 percent Black-owned companies is a form of economic genocide for African American-owned media, a sector that contin­ues to shrink instead of grow.

DeVitre continued: “These companies either have to give away a tremendous amount of equity or make exorbitant ‘ransom’ payments in order to get carried and you can end up bankrupting yourself with this stuff or losing con­trol of your own company and the system is designed to keep perpetuating it.”