Virgin confirms legal action if there is no u-turn on Sky carriage deal

LONDON - Virgin Media has given BSkyB just 30 days or threatened it will face legal action in the row that has removed Sky's basic package of channels, including Sky One and Sky News, from its 3.3m customers if the dispute is not resolved.

The decision follows Sky's rejection of an offer by the broadcaster to have the matter resolved through legally binding arbitration by an independent expert, according to Virgin Media.

Steve Burch, Virgin Media chief executive, said: "We are not interested in prolonging this dispute any longer than necessary, but we will not allow Virgin Media or our customers to be the victim of Sky's market power. In the interest of the consumer, we want these issues resolved quickly."

Virgin Media said it had chosen to publicise its actions today because, given ongoing reporting of the issue, "consumers have a right to understand more about the facts behind the headlines and what Virgin Media is doing to put things right".

Historically, Sky and Virgin Media have each retailed the other's channels to their customers. Virgin Media TV channels, such as Living and Bravo, have been broadcast by Sky to its customers and Sky's basics channels have been broadcast to Virgin Media to its customers.

Sky pulled its basic channels, also including Sky Two, Sky Three and Sky Sports News following a breakdown in negotiations between the two broadcasters last week.

No deal was struck to re-sign the channels by the deadline of midnight on February 28, creating a public relations nightmare for Virgin Media. Its subscribers can no longer watch hit programmes such as '24', 'Lost', 'The Simpsons' and 'Battlestar Galactica'.

Virgin Media has now replaced Sky One with its Virgin Central brand, which transmits on channel 120. Virgin Central is a video-on-demand channel offering shows such as 'Spooks', 'The Office' and 'Alias'.

The broadcaster maintains that Sky has demanded nearly double the price for its basic channels while forcing a dramatic cut in the price it pays for Virgin Media TV's channels.

In a statement, Virgin Media added: "This gaping disparity in channel valuation is the hallmark of Sky's systematic abuse of dominance and their longer term objective of suppressing existing and emerging competition from other companies."

"Throughout both sets of negotiations, Virgin Media have proposed relatively small adjustments to the status quo. Sky, by contrast, have consistently tried to use their market power to fundamentally change in their favour the dynamics of the pay TV market."