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Virgin Media - Sky court threat approaching deadline [Updated]

# Apr 5, 07:46 PM by Cable Forum

The deadline which saw Virgin Media last month threaten to take their rival BSkyb to court, has almost expired without any signs of a deal being reached. On March 5th, Virgin Media issued a 30 day deadline for the dispute to be settled. Sky pulled its basic channels from the Virgin Media network at the end of February. Both Virgin Media and Sky had earlier failed to reach an agreement over cost of carriage fees. Sky had doubled its asking price for its basic channels, such as Sky One and Sky News.

Virgin Media had refused to pay Sky’s asking price to renew their contract with them to carry their basic channels. The old contract had expired on February 28th 2007 and Sky then removed its basic channels from the cable groups network.

Virgin Media, in a last ditch attempt to settle the dispute called for arbitration (An independent third party that would review and solve the entire dispute) but Sky had rejected the proposal.

Virgin Media is still said to be determined to take its satellite rival BSkyB to court, but it is likely there will be no action before the end of the week. The deadline ends on Wednesday night.

The cable group wants to pay a reasonable fee for the carriage of Sky’s basic channels, but if the dispute remains unresolved, Virgin intend to seek damages, for which they claim Sky is guilty of stifling competition and abuse of market dominance.

BSkyb, doesn’t just have Virgin Media’s court threat to contend with at the moment. Right now, investigations are to take place by three different regulators, The Office of Fair Trading, Ofcom and the Department of Trade and Industry. They are investigating Sky’s purchase of 17.9% stake in ITV, which blocked Virgin Media (ntl:Telewest, as it was known then) from acquiring the channel late last year.

Updated 5/4/07

Press reports indicate that Virgin Media received a last minute response from Sky late yesterday, just before Virgin Media’s court threat deadline was due to end.

Sources close to Sky have apparently stated that a letter was sent to Virgin Media HQ, rejecting the cable groups complaints and that Sky strongly feel they are unfounded.

Virgin’s legal team are now left to mull over whether or not to keep to the promise of court action and put words into action and get the ball in motion from next week to start court proceedings.

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