AT&T Inc. and DirecTV were hit with a $10 billion racial discrimination lawsuit Wednesday for allegedly refusing carriage agreements to black-owned media companies, thereby denying them distribution on pay television. The lawsuit, filed in a U.S. District Court in California, claims the companies violated the Civil Rights Act of 1866 by treating 100 percent black-owned companies differently than their white-owned counterparts.       

The legal complaint was filed by the National Association of African American Owned Media (NAAAOM), a newly formed limited liability company that, according to the lawsuit, owns seven original-content TV networks, some of which have produced Emmy-winning shows. In the suit, NAAAOM says its reps have tried for several years to secure distribution agreements with AT&T and DirecTV, but were denied on the basis of race.

NAAAOM estimates that AT&T and DirecTV pay $4 billion and $12 billion in respective programming fees to carry white-owned channels each year, but pay virtually nothing to channels fully owned by African-Americans.

The suit comes as AT&T is seeking regulatory approval for its proposed acquisition of DirecTV. The Dallas-based telecom giant already has a partnership with DirecTV to offer services in markets where its U-Verse television and broadband offerings doesn’t currently reach.

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.

“Diversity is a top priority for AT&T as demonstrated by the national recognition we received for our programs and performance, including DiversityInc naming AT&T No. 1 on its 2014 Top 10 Companies for Supplier Diversity,” Richter said in an emailed statement. “In all AT&T U-verse markets, customers can watch numerous African-American-oriented networks, including BET, BET Gospel, Encore Black, OWN, Starz in Black, TV One, and VH1 Soul. Also, we make Justice Central, a 100 percent African-American-owned television network, available to more than 95 percent of our subscriber base.”

A spokesman for DirecTV was not immediately available for comment.

NAAAOM is headed by the veteran Hollywood executive Mark DeVitre, who is currently a vice president and general counsel for Byron Allen’s Entertainment Studios. In a statement, DeVitre said if NAAAOM’s concerns aren’t quickly resolved he will call for the resignation of AT&T CEO Randall Stephenson and DirecTV CEO Michael D. White, along with several other high-ranking executives.    

Read the full legal complaint here.