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Rupert and Richard fall out over Sky-high prices

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Customers of Virgin Media (prop. Richard Branson) have had some of their BSkyB (prop. Rupert Murdoch) channels withdrawn after a row between the two companies about pricing led to stalemate.

The broadcasters were working to a midnight Wednesday deadline to arrive at a deal that would have permitted cable firm Virgin Media to carry on showing the basic Sky channels.

Virgin Media accused Sky of overpricing and raising its customer charges to a high level, while Sky responded by claiming that its price hikes were justified.

In a bid to claim the moral high ground, Virgin Media said that it had made “continued efforts” to resolve the issue but that its rival had refused an offer of independent arbitration.

Virgin Media chief executive Steve Burch said: “We’re disappointed but not surprised by this outcome.

“Nothing Sky has said or done in the course of this negotiation indicates that they have the slightest interest in doing a commercially viable deal with us.”

Virgin Media customer John Parker told Your Money that he was furious with both the companies for depriving him of viewing for which he has paid already.

“What a mess these two supposedly professional firms have got into,” he said. “I really enjoy the Sky channels, which is the main reason I signed up with Virgin Media. Now I can’t get any of them and I wish I hadn’t bothered with it at all.”

Virgin Media also revealed that it lost 37,000 customers in the last three months of 2006, although revenues remained ahead of target at £1.08bn.



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