The carriage renewal dispute between Hallmark Channels and AT&T U-verse resulted in a disconnect shortly after midnight Wednesday.
The deadline for the old carriage contract expired at 12:01 (ET). As is the case with most carriage disputes, the contract contretemps centered on pricing.
Late Tuesday night, the programmer and the distributor were still negotiating and Hallmark Channel and Hallmark Movie Channel remained on the telco's U-Verse multichannel video systems. But after midnight word came that the channels were being yanked.
AT&T issued a statement that Hallmark had denied AT&T's customers a fair deal and that it would be pulling the channel in favor of "a free preview of the popular family programming from Starz Kids & Family on channel 176 and Turner Classic Movies on channels 794/1794."
"We are very disappointed that Hallmark has refused to provide AT&T and its customers with a fair deal -- one that is no worse than similarly-sized and smaller providers -- and refused to adhere to key obligations under our current deal," said AT&T in a statement. "We offered to extend the current deal while talks continued, and Hallmark rejected that offer.
Hallmark has forced us into a position where we no longer have the rights to carry the Hallmark channels as of 12:01. We don't want customers to lose their programming, but we believe strongly that our customers should not have to pay more than their fair share for Hallmark's channels, which is exactly what Hallmark is demanding."
For its part, the programmer said the telco had dropped Hallmark Channel and Hallmark Movie Channel from its channel lineup at 12:01 due to an inability to reach a new carriage agreement.
Hallmark Channels, as it had indicated earlier, again said early Wednesday morning that it is willing to re-start negotiations toward the distribution agreement -- as long as they are fair and in good faith.
"I was stunned by the apparent disregard for the facts in AT&T's recent statement regarding our negotiations. However, if they are really serious, my team and I are ready for truly fair negotiations," said Hallmark Channels president and CEO Bill Abbott in a statement.
AT&T U-verse first notified its customers via postcards on Aug. 1 that they could lose Hallmark Channel and Hallmark Movie Channel if an agreement wasn't reached by month's end. Negotiations hit a standstill as of Aug. 26.