Sky – "You smell like wee"
Virgin – "I know you are you said you are…"
The World – "…sigh…"

Yep, the spat between Virgin Media and Sky trundles on with all the excitement of the new Hollyoaks credits (which is obviously very exciting) with the news that Virgin are considering legal action against the Murdoch empire if the companies fail to strike a deal over channels the next month.

Virgin, which has 3.3 million cable TV customers, is claiming that those big nasty buggers at Sky Headquarters, and their 8.4
million subscribers, are guilty of "abuse of
dominance" for pulling its basic channels such as Sky One its cable
network.
Branson’s lot said it would take the dispute over distributing
Sky’s channels to the high court if it is not settled within 30 days.
"Following Sky’s withdrawal of its basic channels from Virgin Media’s
TV service, Virgin Media has formally advised Sky that it will pursue
action in the high court if their carriage disputes are not resolved
within 30 days," Virgin Media said in a statement.
"This comes on the heels of Sky’s rejection of an offer by Virgin Media
to have the matter resolved through legally binding arbitration by an
independent expert."

The Guardian report that Virgin have said that it would seek damages if the dispute is not resolved,
adding that it wanted to pay a "reasonable commercial rate" for Sky’s
channels.
Virgin Media is also seeking to renegotiate the deal to have its own
channels, including Living TV, distributed on Sky’s digital satellite
service.
Sky forced down the price it paid to carry Virgin Media Television’s
channels in negotiations concluded earlier this year.
"We are not interested in prolonging this dispute any longer than
necessary but we will not allow Virgin Media or our customers to be the
victim of Sky’s market power," said Steve Burch, the Virgin chief
executive. "In the interest of the consumer, we want these issues
resolved quickly."

What Virgin are most unhappy about is the claim that, under Sky’s current proposal, they would be paying 17
times more per subscriber for Sky’s channels than the satellite company
would pay for the Virgin channels.
"This gaping disparity in channel valuation is the hallmark of Sky’s
systematic abuse of dominance and their longer-term objective of
suppressing existing and emerging competition from other companies. Throughout both sets of negotiations, Virgin Media have proposed
relatively small adjustments to the status quo (mostly in Sky’s
favour). Sky, by contrast, have consistently tried to use their market
power to fundamentally change in their favour the dynamics of the
pay-TV market."

Cable viewers lost access to the Sky channels and to shows such as 24
and Lost last week when the companies failed to agree a price for
showing the TV services on Virgin.
Virgin has accused Sky of demanding double the price of its channels to
around £48.5m a year in the deadlocked distribution talks.
More than 5,600 Virgin Media customers have now posted comments on the
company’s website, many of them critical of the loss of Sky channels.
The dispute does not involve Sky’s premium sports and movie channels.
BSkyB said Virgin’s accusations were "without foundation".
"Sky will defend itself vigorously should Virgin Media decide to extend
its PR campaign to the courts," the company said in a statement. Sky
called on Virgin to return to negotiations. "Virgin Media is not a
victim and its attempt to portray its actions as being in the interests
of consumers ring hollow. We urge Virgin Media to set aside its threats and posturing and engage
genuinely in a sensible negotiation to restore Sky’s basic channels to
its customers." Who gets the feeling that this won’t be the last we’ll all hear of this? [Mof Gimmers]