Crown Says AT&T Might Drop Hallmark Channel

Network faces Aug. 31 deadline
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Crown Media said AT&T might remove Hallmark Channel and Hallmark
Movie Channel from its U-Verse TV service on August 31 if a new carriage
agreement is not reached.

AT&T informed its customers of the possibility of losing
the networks and negotiations are currently at a standstill, according to
Crown.

Crown recently disclosed that it is also negotiating a new
carriage deal with the National Cable Television Cooperative.
AT&T U-Verse similarly came close to removing AMC just
before the launch of Mad Men last month.

"AT&T
U-verse TV recently went through a notable carriage renewal and is implementing
the scare tactics it used to negotiate with another programmer against Hallmark
Channels, one of the nation's last surviving independent cable
networks," said Joan Gundlach, executive vice president, distribution,
added. "It is disappointing that AT&T U-verse does not see the value
we bring to their customers and that they would wield their power to strong-arm
our channels."

AT&T issued a statement in response.

"Despite Crown Media's unreasonable and
inflexible demands, AT&T is working to keep Hallmark Channel and Hallmark
Movie Channel on AT&T U-verse TV at a fair price for its customers,"
the statement said. "We are making every effort to reach a fair agreement
and continue providing these channels to our customers. Frankly, we're
surprised that Hallmark has decided to take its negotiations public, instead of
working with us in good faith, especially since we've made numerous offers to
Hallmark."

Bill Abbott, President and CEO of Hallmark Channels, responded to AT&T's statement.

"It is unfortunate that AT&T U-verse's statement of the situation is inaccurate. They are a multi-billion dollar organization bullying one of the nation's last surviving independent cable networks by insisting on unreasonable rates that would seriously jeopardize our longevity. Hallmark Channel and Hallmark Movie Channel are two of the few remaining family-friendly networks offered on television and represent less than 1% of AT&T's total basic programming fees! Although we would have preferred to conduct the negotiations privately, we have been forced to comment since AT&T advised its customers weeks ago that Hallmark Channels may be dropped on August 31, 2010."

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