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#154314 - 28th Apr 2007 6:33am Virgin Media: Sky Tried To Eliminate Us
MattLFC Offline
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Registered: 14th Aug 2004
Posts: 22315
Loc: Moreton/Beirut/Mobile
Originally Posted By: Digital Spy
Virgin Media has filed papers with the high court accusing Sky of attempting to "effectively eliminate" it.

In the papers, the cable operator has based its case on the premise that Sky forced it to accept lower carriage fees for the Virgin Media Television channels, such as Living and Bravo, while "imposing" higher fees for making the Sky basic channels, such as Sky One and Sky News, available to Virgin.

Virgin Media's case ties together the Virgin Media Television carriage negotiations with the later ones involving the Sky Basics bouquet. Citing sections of the Competition Act 1998 and an article of an EU Treaty, Virgin has claimed that Sky's actions - and what it termed "abusive" behaviour during the negotiations - amounted to a plot "designed to stifle the emergence of greater potential competition ... to strengthen BSkyB's dominant position on the pay TV retail market and pay TV purchasing market."

Virgin Media has claimed that Sky initially offered to pay nothing for the Virgin Media Television channels, a figure that later rose to £5.1m, compared to £35.6m in 2006. Furthermore, Virgin revealed that Sky's final offer for its basic channels consisted of £40.3m for linear carriage and £48.4m for high definition and on demand content, which it claimed was 71% and 105% up on last year.

If Virgin cant keep up, then maybe its time for them to get out. Firstly, the Sky deal was agreed 3 years ago, hence the price went up on last year, everything in life has increased in cost in the last 3 years, especially television programming.

Secondly, the deal for the Flextech channels was done whilst it was still Telewest, so why Virgin are crying over it now I don't understand.

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#154419 - 29th Apr 2007 10:41am Re: Virgin Media: Sky Tried To Eliminate Us [Re: MattLFC]
MattLFC Offline
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Registered: 14th Aug 2004
Posts: 22315
Loc: Moreton/Beirut/Mobile
I was thinking yesterday, should it not be Virgin who are actually now scared of the fact they have real competition for the first time rather then Sky??

After all, until now, NTL Telewest have dominated the all-inclusive market without any competition. No other provider has been able to offer TV, telephony and internet services previously. Now Sky can offer their broadband service as well as their television and telephone packages (and coming soon, reduced rate landline telephone line rental), then this is the first time NTL Telewest/Virgin Media have had a competitor who can compete on all three fronts.

Also, Sky are now undercutting Virgin Media greatly on price for their combined services, something which they have never experienced in the past. With Sky always previously having to rely on 3rd party internet services for thier customers and Virgin offering stupid deals to get customers to join them, the market imho, has only now just evened up.

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