AT&T Broadband last week was accused in a lawsuit of intentionally failing to upgrade minority neighborhoods in Florida in order to focus its attention on non-minority and high-income subscribers.
The action, filed last Thursday in the U.S. District Court for the Southern District of Florida, claims AT&T engaged in "electronic redlining." It also accuses the MSO of overcharging subscribers and lying to government agencies about its customer-service performance.
The plaintiffs are seeking an injunction that would halt AT&T's merger with Comcast Corp. by blocking the transfer of AT&T franchises.
AT&T officials denied the allegations contained in the suit.
"AT&T Broadband completely rejects any claim of redlining, and we will vigorously oppose this lawsuit," senior vice president and general counsel Rick Bailey said in a prepared statement.
"We are confident that this lawsuit will have no impact on the expected close of our merger with Comcast," Bailey added.
Two AT&T subscribers in Broward County — Gwen Hudson and Cynthia Martin — filed the lawsuit, which seeks class-action status.
Broward County is one of the markets in which AT&T has had trouble transferring its franchise to Comcast. Last month, the county demanded that the MSO supply it with data on revenue and expenses from specific areas of the county franchise.
The National Association for the Advancement of Colored People has also accused AT&T of redlining.
Christopher Larmoyeux, the lead attorney for the plaintiffs, said he has gathered evidence that proves AT&T Broadband engages in that practice.
"We've looked at data that suggests that of those eligible areas that they could have provided the service, they've only done it in less than 1 percent for African-Americans, whereas they've tried to build out virtually 100 percent of non-minority neighborhoods," Larmoyeux said.
The U.S. District Court has scheduled a discovery hearing on Sept. 5, at which Larmoyeux said he'll seek to force the MSO to turn over more detailed data about upgrades.
Larmoyeux's legal team includes Maurice Hall, a former Palm Beach County Circuit Court judge.
In 1991, Larmoyeux successfully reached a settlement for a client who sued another major media company, The Walt Disney Co.
Larmoyeux represented Mary Costa, the voice of Sleeping Beauty, who sued Disney for breach of contract in order to get a cut of VHS sales of the movie.