Virgin "disappointed but not surprised"

Virgin Media said this morning that it is "disappointed but not surprised" that a new carriage deal for Sky's basic channels has not been reached.

The cable operator has attacked claims from Sky that it was unwilling to discuss a new carriage agreement this week. In a statement, Virgin Media said: " Throughout the dispute, Virgin Media has made continued efforts to reach an agreement with Sky. On Tuesday evening, after a breakdown in discussions, we offered to let an independent expert that both sides could trust take a dispassionate look at the facts and decide what was fair and reasonable. Sky formally rejected this offer on Wednesday morning and again on Wednesday afternoon following a personal call to James Murdoch, instigated by Virgin Media's Chairman Jim Mooney and CEO Steve Burch."

Virgin Media's CEO Steve Burch said that he was "disappointed but not surprised," and added that "nothing Sky have said or done in the course of the negotiation indicates they had the slightest interest in doing a commercially viable deal." Mentioning Sky's plan - which will require regulatory approval - to withdraw its channels from Freeview in favour of launching a pay service on digital terrestrial, he continued: "Their action here is consistent with their plans to withdraw their free channels from Freeview and, in our view, reflects their desire to limit consumer choice."

Sir Richard Branson, Virgin Media's largest individual shareholder, said: "We're sorry that Sky have pulled their basic channels from our service. These however do not include their sports and movie channels, which will continue to be available to Virgin Media's customers. When Virgin Media launched last month, we promised to put the power of the entertainment industry back in the hands of UK consumers, giving them the service they deserve and the value they'd expect. Consumers have my whole-hearted assurance that Virgin Media will not allow this dispute to prevent us from giving them the freshest and most exciting TV service in the UK. With Virgin Central and our massive library of on-demand, programming, there's a lot to look forward to."