Virgin threatens Sky with court action

Virgin Media has warned Sky that unless the ongoing carriage dispute over the satellite broadcaster's basic channels is resolved within 30 days, it will "pursue action in the high court."

Characterising Sky's conduct in the dispute as "extreme," the cable operator said that in any court action it would seek supply of Sky's basic channels - which include Sky One and Sky News - "at a reasonable commercial rate". It also indicated that it would expect "fair payment for Sky's carriage of Virgin Media TV channels, such as Living and Bravo."

Virgin Media also said that it would "seek damages if the dispute is not resolved."

The company's CEO, Steve Burch, said in a statement: "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."

The inclusion of Virgin's recently-signed deal with Sky for carriage of the former Flextech channels in the threat of legal action comes after earlier comments that the agreement was reached under duress due to what Virgin calls Sky's "dominant" position in the multichannel marketplace.

"Even when adjusted for the Sky basic channels' marginally higher share of total viewership and its larger subscriber base, Sky is demanding an annual price per subscriber some 1700 percent higher than it pays for the Virgin Media TV channels," the company said this afternoon.

"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 (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."

> Click here to read Virgin's statement in full