- Associated Press - Friday, June 29, 2012

NEW YORK (AP) - Satellite broadcaster Dish Network Corp. on Friday said it would replace AMC Networks Inc.’s channels with HDNet channels at midnight on Saturday, ratcheting up a fee dispute.

Dish, the third-largest provider of pay-TV signals in the U.S., had earlier said it would drop AMC’s channels because they’re too expensive. Fee disputes between pay-TV companies and TV channels often result in channels being temporarily dropped. They usually end with the parties reaching agreement on fees.

The new season of “Breaking Bad,” a hit AMC show, premieres on July 15. Other popular AMC shows are “Mad Men” and “The Walking Dead.”

AMC’s contract with AT&T Inc., the eighth-largest provider of pay-TV signals, also expires at midnight on Saturday. AT&T is negotiating with AMC and hasn’t said it’s cutting off the channels, but says AMC is “seeking an excessive rate increase.”

AMC says the real reason Dish is playing hard-ball is that it wants to retaliate for a lawsuit Voom HD, an indirect subsidiary of AMC, filed against Dish for dropping it. The trial itself has not started, but a judge has ruled that Dish destroyed evidence in the case.

New York-based AMC has started a campaign that prompts viewers to email Dish and AT&T to tell them to keep the channels.

Englewood, Colo.-based Dish is replacing the eponymous AMC channel plus sister channels WE and IFC with HDNet Movies, Style and HDNet.

AMC Networks requires us to carry low-rated channels like IFC and WE to access a few popular AMC shows. The math is simple: It’s not a good value for our customers,” said Dave Shull, senior vice president of programming for Dish.

AMC Networks further devalues its programming by making its handful of popular shows available via iTunes, Netflix and Amazon.com, Dish said.

AMC shares fell 39 cents, or 1 percent to $35.62 in afternoon trading, going against a rising market. Dish shares added $1.01, or 3.7 percent, to $28.55. AT&T shares edged up 18 cents to $35.57.

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