By Melodie Warner Dish Network Corp. (DISH) will replace three AMC Networks Inc. (AMCX) channels with HDNet Movies and HDNet at midnight on Saturday, reiterating it won't renew its AMC contract due to the high costs. Dish had already dropped AMC's sibling channel Sundance, and declared its intention to drop AMC, along with its IFC and WE tv channels on Saturday. That is also the deadline for AT&T Inc. (T) to reach a new deal to carry AMC. AT&T said Thursday it is still negotiating to renew its U-verse TV contract with AMC Networks, saying AMC Networks is seeking an "excessive" rate increase in overall fees. Dish's move and AT&T's negotiations highlight increasing tensions in the television industry as pay-TV distributors balk at the rising cost of programming. Dish said HDNet Movies will replace AMC, while Style and HDNet will replace WE and IFC. "HDNet Movies and HDNet are exciting offerings for our customers," said Dave Shull, senior vice president of programming. "These are networks that will bring great entertainment, including first-run, commercial-free movies in high definition to our customers. HDNet is a small cable network launched in 2001 by Mark Cuban and General Manager Philip Garvin that plans to rename itself AXS TV. "American Idol" host Ryan Seacrest, AEG and Creative Artists Agency have also agreed to take equity stakes as part of an overhaul of the channel. AMC airs such well-known dramas as "Mad Men," "Breaking Bad" and "The Walking Dead." The company has previously attributed Dish's moves to drop its channels to a recent setback for the satellite operator in a years-old lawsuit between the two companies relating to a now-defunct series of high-definition channels called VOOM. But Dish subsequently issued a statement saying AMC was incorrectly attempting to tie together two separate issues. Write to Melodie Warner at melodie.warner@dowjones.com
