LONDON: Virgin Media escalated its dispute with British Sky Broadcasting yesterday by filing a law suit with the High Court related to Sky's withdrawal of its TV channels from the Virgin network.

Negotiations over Virgin's broadcasting of the channels broke down a few weeks ago after it refused to meet BSkyB’s payment demands [WARC News: 26-Feb-07].

BSkyB is also said to have declined the opportunity to resolve the matter via independent experts.

Virgin Media argues that the News Corporation company is abusing its dominant position in the market, thus breaking both the UK’s Competition Act and the European Commission Treaty.

Recent reports have also suggested that a number of advertisers were seeking rebates from Sky, as they had effectively lost some three million cable viewers as a consequence of the dispute with Virgin.
Virgin Media’s chief executive Steve Birch said: “Litigation is obviously a serious step and a last resort, but we are determined to have these issues resolved as quickly and fairly as possible.”

BSkyB’s chief operating officer, Mike Darcey, responded: “This action is without foundation and is an obstacle to bringing back Sky’s basic channels for Virgin Media customers.

“The best and quickest way to give customers what they want is to resume negotiations and we’ve invited Virgin Media to return to the table.”

UK media regulator Ofcom announced earlier this month that it would be reviewing the structure of the UK’s pay-TV market in light of BSkyB’s pre-eminence, and many observers have also voiced strong concerns about the company’s 17.9% share in ITV, the country’s largest commercial broadcaster.

Data sourced from Financial Times; additional content by WARC staff