Virgin Media has instigated legal proceedings as it threatened to do last month when attempts to broker a deal failed to get off the ground.

According to Virgin, the proceedings are based on the UK Competition Act 1998 and Article 82 of the EC Treaty, both of which prohibit a company from abusing its dominant market position.

Virgin Media chief executive Steve Burch said: "This dispute is one very specific example of how UK consumers are being denied the benefits of a diverse, dynamic and competitive pay TV market.

"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."

Sky accused Virgin Media of putting its own financial interests before the interests of customers.

"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," said Mike Darcey, chief operating officer of BSkyB.

The dispute has been running since February, when Sky pushed up the price it was charging Virgin Media for the rights to show Sky One, Sky News, Sky Sports and Sky Travel.

Virgin Media, formerly ntl:Telewest, refused to pay the extra money, claiming the support of its customer base. Sky quickly began an advertising campaign that aimed to convince Virgin Media customers to switch if they wanted to see programs such as Lost and 24 again.

The argument descended into a petty squabble with both sides told to get their act together by the National Consumer Council (NCC).

Sky's Darcey said that Virgin Media's customers were unhappy with the service they were receiving.

“Virgin Media is saving money as a result of this dispute but it hasn't reduced prices. Millions of customers have lost access to the shows they enjoy and it is clear that many resent paying full prices for fewer channels," he said.

http://www.virginmedia.com/
http://www.sky.com/

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