- Associated Press - Wednesday, September 1, 2010

LOS ANGELES (AP) - Two Hallmark channels have been dropped from the lineup offered to 2.5 million AT&T U-verse customers in a dispute over fees.

As of Wednesday morning, there was no sign of progress toward reaching a deal.

The Hallmark Channel and Hallmark Movie Channel are owned by Crown Media Holdings Inc.

AT&T says in a statement that Crown refused to agree to a “fair deal” for the channels that was no worse than was offered to similarly sized distributors.

But Crown CEO Bill Abott says he was “stunned by the apparent disregard for facts” in AT&T’s statement.

As of early Wednesday, AT&T has replaced the Hallmark channels with a free preview of Starz Kids & Family and Turner Classic Movies.

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