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In Full: Latest Sky statement on Virgin dispute

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BSkyB issued the following statement late Tuesday as its high profile carriage dispute with Virgin Media rumbled on.

"Following another statement issued today by Virgin Media, Sky believes that Virgin Media should set aside its rhetoric and return calmly to the negotiating table to reach an agreement for the benefit of its customers. Further displays of acrimony are not a route to a speedy resolution that will ensure that Sky's basic channels remain available to Virgin Media's customers from 1 March 2007.

"In light of Virgin Media statements and in the interests of an accurate record, Sky is making a series of clarifications to highlight its willingness to keep its basic channels on air for cable TV customers.

"Sky has consistently reached out to Virgin Media to put forward solutions to the current situation. In contrast, Virgin Media has made no revised proposal to Sky since 22 February.

"Most recently, Sky contacted Virgin Media on Monday 26 February with a revised and improved offer. As well as safeguarding access to Sky One, Sky Two, Sky News, Sky Sports News and Sky Travel, the proposed agreement would bring new services to Virgin Media customers, including Sky Three and Sky Arts.

"Under the terms of the new offer, the cost to Virgin Media of offering Sky's basic channels would be around 3 pence per day for each of its TV customers. For comparison, on a daily basis this is the amount that a Virgin Media mobile phone customer pays to send a single SMS text message to another customer on the Virgin Media network.

"Sky refutes Virgin Media's statement that its revised offer "specifically provides for a minimum guaranteed annual payment that is twice the current annual payment".

"Importantly, the minimum guarantees of future revenue which form part of Sky's offer take into account estimates of future subscriber growth provided by Virgin Media during negotiations.

"Moreover, Sky is offering Virgin Media substantially more value in the new deal than in the one set to expire, including the option for Virgin Media to carry high definition (HD) and video on demand (VOD) services for these channels.

"If Virgin Media believes that Sky's basic channels are not worth around 3 pence per day to its customers, Sky has made an alternative proposal that would ensure that Virgin's customers would nevertheless continue to enjoy access to the shows they love.

"At no cost to Virgin Media, Sky would retail its basic channels directly to cable customers on the Virgin Media network. This initiative would operate in a similar way to the means by which third-party broadcasters enjoy open access to Sky's digital satellite platform.

"Sky believes that a decision by Virgin Media to provide access to its platform would indicate a willingness to compete and to provide choice to customers. At present, the only means for third-party broadcasters to reach customers on Virgin Media's network is through a wholesale channel supply agreement with Virgin Media.

"Virgin Media has made negative comments about the value of Sky's basic channel portfolio, describing Sky's programming investments as a "failure". Yet at the same time, Virgin Media is claiming paradoxically that Sky has a "monopolistic position in the market" and is using "market power to bully competitors".

"Industry figures show that Sky's basic channels were watched for at least two hours per week on average in 2006 by over a million people in cable TV homes (source: BARB).

"The popularity of Sky's basic channels has continued this year. All of cable TV's top 25 rated pay-TV entertainment shows this year have been on Sky One (source: BARB).

"Late last night, Virgin Media rejected Sky's new proposals without making a revised offer of its own. This morning, Virgin Media chose again to go on national radio to criticise Sky.

"Commenting on the negotiations, a Sky spokesperson said: 'The emotive tone and intensity of Virgin Media's communications do the company no credit. Virgin's management appears to have a greater interest in denigrating Sky through a PR offensive than in delivering real benefits to customers. Sky has made a new offer to Virgin Media because we don't want cable TV customers to lose the programmes they enjoy. For around 3p per customer per day, or the cost of a single text message, Virgin could make sure that its customers enjoy more Sky channels than ever before. Our offer remains on the table and we're available for talks with Virgin Media at any time.'"

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