AT&T Drops ESPN 3D, Citing High Carriage Fee

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After carrying ESPN 3D during its rookie year, AT&T dropped the network from the U-verse TV lineup after its carriage agreement expired Sunday, July 31, saying that the price tag was simply too high.

"We're always listening to customers and working to make sure we're delivering the channels they want, while keeping costs down," AT&T said in a statement. "The price tag for ESPN 3D was too high, especially considering the low demand we've seen from customers. We've decided not to renew our agreement for ESPN 3D."

Asked to comment, ESPN said that "unfortunately we could not reach agreement on a renewal at this time" with AT&T. The sports programmer said ESPN 3D has featured more than 120 events in its first year, and is available to more than 60 million households through Comcast, DirecTV, Time Warner Cable, Bright House Networks and Verizon FiOS TV.

ESPN 3D logo

AT&T charged an additional $10 per month for the U-verse 3D Technology package, which consisted of ESPN 3D and a small number of 3D movies on-demand. The telco said the $10 charge will be automatically removed from customers'  bills and that customers will receive credit for any charges incurred after ESPN 3D was removed.

"We continue to add new channels and content that our customers want," AT&T said. "We offer several 3D titles today in our U-verse Movies library, and we'll look to deliver more 3D channels and content, at a reasonable cost, as more of our customers purchase 3DTVs and tell us they want it."

Last week, AT&T added Starz's 3D VOD package, which currently offers four movies to subs of the premium network for no additional charge.

After initially high expectations, 3DTV sales in 2010 were a big disappointment for consumer-electronics manufacturers. Last month the Consumer Electronics Association issued a more bullish forecast for 2011 for 3D displays, projecting 3.6 million 3DTVs will ship in the U.S. in 2011, up from January's forecast of 1.9 million units.