Virgin threatens legal action
Cable group Virgin Media has threatened to take its dispute with pay-TV rival BSkyB to the high court if the warring companies fail to strike a deal over the next month.
Virgin, which has 3.3 million cable TV customers, claims Sky, with 8.4 million subscribers to its satellite service, is guilty of "abuse of dominance" for pulling its basic channels such as Sky One its cable network.
The cable operator said it would take the dispute over distributing Sky's channels to the high court if it is not settled within 30 days.
"Following Sky's withdrawal of its basic channels from Virgin Media's TV service, Virgin Media has formally advised Sky that it will pursue action in the high court if their carriage disputes are not resolved within 30 days," Virgin Media said in a statement.
"This comes on the heels of Sky's rejection of an offer by Virgin Media to have the matter resolved through legally binding arbitration by an independent expert."
Virgin said it would seek damages if the dispute is not resolved, adding that it wanted to pay a "reasonable commercial rate" for Sky's channels.
Virgin Media is also seeking to renegotiate the deal to have its own channels, including Living TV, distributed on Sky's digital satellite service.
Sky forced down the price it paid to carry Virgin Media Television's channels in negotiations concluded earlier this year.
"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," said Steve Burch, the Virgin chief executive. "In the interest of the consumer, we want these issues resolved quickly."
Virgin claims that, under Sky's current proposal, it would be paying 17 times more per subscriber for Sky's channels than the satellite company would pay for the Virgin channels.
"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," Virgin said.
"Throughout both sets of negotiations, Virgin Media have proposed relatively small adjustments to the status quo (mostly in Sky's favour). Sky, by contrast, have consistently tried to use their market power to fundamentally change in their favour the dynamics of the pay-TV market."
Cable viewers lost access to the Sky channels and to shows such as 24 and Lost last week when the companies failed to agree a price for showing the TV services on Virgin.
Virgin has accused Sky of demanding double the price of its channels to around £48.5m a year in the deadlocked distribution talks.
More than 5,600 Virgin Media customers have now posted comments on the company's website, many of them critical of the loss of Sky channels.
The dispute does not involve Sky's premium sports and movie channels.
Chris Tryhorn
Monday March 5, 2007
MediaGuardian.co.uk
© Guardian News and Media Limited 2007
Cable group Virgin Media has threatened to take its dispute with pay-TV rival BSkyB to the high court if the warring companies fail to strike a deal over the next month.
Virgin, which has 3.3 million cable TV customers, claims Sky, with 8.4 million subscribers to its satellite service, is guilty of "abuse of dominance" for pulling its basic channels such as Sky One its cable network.
The cable operator said it would take the dispute over distributing Sky's channels to the high court if it is not settled within 30 days.
"Following Sky's withdrawal of its basic channels from Virgin Media's TV service, Virgin Media has formally advised Sky that it will pursue action in the high court if their carriage disputes are not resolved within 30 days," Virgin Media said in a statement.
"This comes on the heels of Sky's rejection of an offer by Virgin Media to have the matter resolved through legally binding arbitration by an independent expert."
Virgin said it would seek damages if the dispute is not resolved, adding that it wanted to pay a "reasonable commercial rate" for Sky's channels.
Virgin Media is also seeking to renegotiate the deal to have its own channels, including Living TV, distributed on Sky's digital satellite service.
Sky forced down the price it paid to carry Virgin Media Television's channels in negotiations concluded earlier this year.
"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," said Steve Burch, the Virgin chief executive. "In the interest of the consumer, we want these issues resolved quickly."
Virgin claims that, under Sky's current proposal, it would be paying 17 times more per subscriber for Sky's channels than the satellite company would pay for the Virgin channels.
"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," Virgin said.
"Throughout both sets of negotiations, Virgin Media have proposed relatively small adjustments to the status quo (mostly in Sky's favour). Sky, by contrast, have consistently tried to use their market power to fundamentally change in their favour the dynamics of the pay-TV market."
Cable viewers lost access to the Sky channels and to shows such as 24 and Lost last week when the companies failed to agree a price for showing the TV services on Virgin.
Virgin has accused Sky of demanding double the price of its channels to around £48.5m a year in the deadlocked distribution talks.
More than 5,600 Virgin Media customers have now posted comments on the company's website, many of them critical of the loss of Sky channels.
The dispute does not involve Sky's premium sports and movie channels.
Chris Tryhorn
Monday March 5, 2007
MediaGuardian.co.uk
© Guardian News and Media Limited 2007