Virgin takes BSkyB dispute to court

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LONDON -- U.K. cable and mobile operator Virgin Media said Thursday that it has filed legal proceedings in the high court against satcaster British Sky Broadcasting over the removal of some of the satellite broadcaster's channels from its service.

In February, the two companies failed to reach a carriage agreement for four basic-tier channels including entertainment channel Sky One and 24-hour channel Sky News, which resulted in the channels no longer being transmitted to Virgin's 3.5 million cable television homes.

Virgin's legal challenge argues that Sky is abusing its dominant position in the U.K. pay TV market and contravening U.K. and European competition law.

The issue already has triggered a review of the pay TV market here by U.K. media regulator Ofcom.

Virgin Media CEO Steve Burch said the legal case was "a last resort," but that consumers were being denied choice.

"This dispute is one very specific example of how U.K. consumers are being denied the benefits of a diverse, dynamic and competitive pay TV market," Burch 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, however, remained dismissive of the claim, pointing out that Virgin was charging its customers the same subscription fees for fewer television channels.

BSkyB chief operating office Mike Darcey said the legal action was "an obstacle" to achieving a deal and called on the cable operator to "give customers what they want" and resume negotiations.

"We've invited Virgin Media to return to the table" Darcey said.

"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 added. "Increasingly, customers will ask whether Virgin Media is putting its own financial interests before giving them the service they want."
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