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Univision networks dropped from AT&T U-Verse system in fee dispute

Television giant AT&T and Univision Communications, the nation's largest Spanish-language media company, are embroiled in a high-stakes feud over programming fees.

Unable to reach an agreement on a new contract, AT&T removed the signals of most of Univision's networks from its U-Verse pay-TV system late Thursday. The networks dropped from U-Verse include the flagship Univision network, secondary broadcast outlet UniMas and cable channels Galavision and Univision Deportes.

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AT&T has about 6 million U-Verse customers nationwide, including about 300,000 homes in the Los Angeles region.

The outage does not affect AT&T's DirecTV customers because those subscribers are covered by a separate contract.

"Despite Univision’s tireless efforts to reach an agreement, AT&T is denying its U-Verse customers access to our networks and stations, which have the most popular Spanish-language news, sports and entertainment," Univision said in a statement.

AT&T said the dispute is about money.

“This is about nothing more than Univision demanding we pay an outrageous price increase," AT&T said in a statement. "We are fighting for all of our customers to keep what Univision charges at a reasonable amount."

The dispute comes at an important time for Univision. Owners of the privately held media company are considering whether to take the company public. Univision had planned an IPO for last year, but it was put on hold because of a dramatic drop in the value of media companies.

Univision is expected to decide soon whether to go forward with the IPO this summer. In addition, Univision is set to broadcast the March 9 debate between Democratic presidential candidates Hillary Clinton and Bernie Sanders.

Los Angeles billionaire Haim Saban, a longtime Clinton supporter, is one of Univision's owners.

The flap was not unexpected.

AT&T has long said that it intends to negotiate lower fees for the TV networks carried on U-Verse. The company acquired DirecTV last summer, and DirecTV pays significantly less per subscriber for some of the same channels that U-Verse carries. AT&T wants to bring the U-Verse rates into alignment with those paid by DirecTV.

AT&T, now the nation's largest pay-TV operator, has said the effort will lead to substantial savings.

"We've already renegotiated a ton of contracts and as a result of that, we are bringing U-verse content costs down now," John Stankey, chief executive of the AT&T Entertainment Group, said earlier this week at a Morgan Stanley investor conference in San Francisco.

"They are coming down because we are standardizing content agreements," Stankey said.

Univision alleged that AT&T was harming Latino consumers.

"AT&T is redlining our audience by refusing to recognize the value of the Univision networks and the consumers we serve," Univision said in its statement. "AT&T's discriminatory behavior is preventing Hispanic America from receiving content and information in language and in culture, which is especially vital during this election year."

Not so, said AT&T.

"Numerous and diverse programming deals we have signed recently prove this can be accomplished," said AT&T, noting that the company carries 78 Spanish-language channels.

"We hope to resolve this matter quickly and appreciate our customers’ patience. Spanish-language channels are important to us and our customers," AT&T said.

Twitter: @MegJamesLAT

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