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Starz Encore Sues AT&T Broadband

Starz Encore Group LLC has sued AT&T Broadband in county court in
Colorado in an effort to compel the operator to pay $44 million in programming
commitments it is refusing to honor.

According to the lawsuit, filed July 10 in Arapahoe County District Court,
AT&T Broadband inherited an affiliation agreement when it acquired
Tele-Communications Inc. two years ago. Under the agreement, the company agreed
to pay 'specific fees and reimbursement of costs' to Starz Encore in return for
25 years of premium-movie programming.

The programmer alleged that AT&T Broadband had another opportunity to
reject the TCI terms in 2000 in favor of the pact it acquired along with the
former MediaOne Group Inc. systems. Instead, AT&T Broadband chose to apply
the TCI terms to the MediaOne properties, according to the suit.

Now, however, the programmer has been notified that AT&T Broadband will
not comply with the contract and will not pay $44 million that Starz Encore
alleged is now due.

The suit seeks a declaratory judgment from the court, validating the
agreement, and an order to force AT&T Broadband to pay the programming costs
claimed by Starz Encore. The programmer also asked for 'other appropriate
compensatory damages.'

The suit occurred as John Malone, the major investor in Starz Encore partner
Liberty Media Group, was resigning from the board of the suit's defendant,
AT&T Corp.